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Tougher Fuel Efficiency Standards for US Auto Industry

The US Auto Industry is bracing for tougher fuel efficiency standards.  The new standards call for new vehicles to average 35.5 miles per gallon by 2016.  The new measures were announced on September 15 in the midst of falling sales of small fuel-efficient cars.

Sales in small car segments have dropped 15 per cent or more in the year to date.  Used car buyers are also buying less small cars.

Used car buyers also are showing less interest in smaller cars. Kelley Blue Book officials say residual values for small cars have plummeted while they have gone up considerably for large cars and sport utility vehicles.

Adesa, a large wholesale auto auction company that conducts sales all over the country, reported that while pickup truck prices plummeted 17 percent in value from August 2007 to August 2008, they have risen 23 percent since then. Meanwhile, the auction house said, compact car prices went up by 17 percent from August 2007 to August 2008, but have fallen 15 percent since then.

Research is showing that US car buyers are wanting to buy more fuel efficient vehicles but they are not wanting to buy a smaller car.  This is posing a new set of problems to be solved by auto-makers if they are to satisfy consumers in the future.  As the gas prices at the pump fall people are moving back towards larger vehicles.  But how long gas prices remain at low levels remains to be seen.

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