Meeting higher fuel-efficiency standards will be tough for Detroit's Big Three. Here's what they'll have to do:
IMPROVE SMALL CARS
GM (GM ), Ford (F ), and Chrysler (DCX ) have all upped rebates to sell their unpopular small cars. With larger vehicles penalized for gas guzzling, they'll have to redouble efforts to develop cars that consumers want.
Auto makers increased horsepower throughout the 1990s at the expense of fuel efficiency, particularly for SUVs. Now they'll have to reverse that trend.
BOOST FUEL-EFFICIENCY R&D
The Big Three lag the Japanese in developing fuel-efficient engines for cars and SUVs. To catch up, they'll need to devote far more money to improving technologies such as hybrid vehicles and to designing more SUVs on car platforms.
Large SUVs such as the Chevrolet Suburban lower Detroit's average fuel efficiency for trucks. The Big Three may have to cut production of their biggest gas-chuggers to meet the new standards.