A Case Study Of The Corporate Average Fuel Economy?

An in-depth case study of the US auto industry from 1987-2002 sheds light on how global competition impacts domestic sector dynamics and productivity growth.
Studies of productivity by MGI and others have shown that when new, more productive players enter a sector previously sheltered from global competition, the sector 's overall level of productivity rises. Less clear, however, is what happens at a company level to link cause and effect.
Taking US automotive manufacturing between 1987 and 2002 as representative of a sector facing increased competitive intensity, MGI examined how the "Big Three" US automakers responded to more productive Japanese entrants over the period. All three adopted innovations in processes and products to catch up

The Corporate
Average Fuel Economy (CAFE) is a set of nationalized standards for automotive fuel efficiency that went into effect after the Arab oil embargo in the early 1970s. The standards were upgraded in 2012 to increase fuel efficiency goals to 54.5 miles per gallon by 2025. The development and implementation of new technologies to reach these goals require substantial investment from automotive companies to ensure that new car models are both fuel-efficient and safe
American consumers are buying new cars and trucks at the strongest pace in years, offsetting car makers ' troubles elsewhere and leading the biggest U.S. auto maker to forecast fat profits ahead.
Overall U.S. sales rose 9% last month compared with the same period in 2013 to a nearly decade high. Demand for highly profitable sport-utility vehicles, once scorned as
Detroit 's gas guzzling cash cows, continues to rise amid low fuel prices and more efficient designs.
Emerging markets are a sore spot for auto makers world-wide. Russia and Brazil are just the latest reminder of the pitfalls that come from investing in developing auto markets.
GM isn 't backing down, however. It would invest more money in products for