Although Detroit's big automakers have been whining about the potential negative impact of higher fuel efficiency standards might have on their business, a report issued this week says they could actually profit from stiffer regulations.
The study, conducted by Citi and Investor Network on Climate Risk studied a proposal in the U.S. senate to raise the CAFÉ standards. Most car makers would be unaffected in any changes through 2012. General Motors, however, could see an increase of 25 cents a share in earnings as a result of the changes. Chrysler would benefit the least.
The gains would come from netting business now going to foreign manufacturers. Toyota is now the world's largest auto maker, thanks to its Prius hybrid.
Suppliers of turbochargers, transmissions and diesel engine fuel injectors, meanwhile, could gain $4.3 billion in revenue by 2012 and even more by 2020.
Washington is pondering legislation that would raise fuel economy standards for passenger vehicles to 35 miles per gallon by 2020, about 10 miles per gallon above today?s levels. The CAFE standard have been kept relatively static for 32 years.