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The Big Three Are Out to Lunch

|Includes: Toyota Motor Corporation (TM)

Obama announced the adoption of California’s stringent CAFE standards nationally, which will force car makers to improve gas mileage to 39 mpg for cars and 30 mpg for trucks in six years. The move is expected to save 1.8 million barrels/day of crude by 2016, cutting imports by 10%. But it is expected to raise the cost of a new car by $1,300. Left unsaid among the smiles and platitudes is that fact that the Japanese have been preparing for this day for 20 years, and the Big Three, with nothing even remotely close on the drawing board, have been hung out to dry by the consumer. One man behind Obama stood especially tall. The new regulations put Toyota USA (NYSE:TM) president Jim Lentz in the sweet spot, with the largest hybrid market share of any manufacturer. This month its third generation, $22,000, 50 mpg Prius is bringing new customers into the showrooms in droves, helping to boost MOM sales by 15%.