"Energy security and climate change are national priorities that require federal leadership and the president's direction makes sense for the country and the industry," said new GM CEO Fritz Henderson.

He stressed that harmonizing the various regulatory standards on the auto industry "will benefit consumers across America."

Chrysler said it "welcomes the president's announcement of a framework for a single national approach for fuel economy and greenhouse gas standards."

The auto firm, which is currently undergoing drastic restructuring efforts at the behest of the White House, added in a statement: "We thank the administration for their leadership."

Chrysler said it has "long been an advocate for a national approach to fuel economy as the most effective way to help the nation achieve energy security and environmental sustainability.

"With regulatory clarity and certainty, Chrysler and its alliance partner, Fiat, will now be able to concentrate their resources on developing a nationwide fleet of clean, fuel-efficient vehicles."

Obama said he would be opening a new front in the battle against climate change by unveiling on Tuesday sweeping mileage and carbon dioxide gas emission requirements for US cars and light trucks.

The new regulations will comprise the first-ever US nationwide standards to combat greenhouse gases pollution for autos and will force struggling US automakers to dramatically boost the efficiency of cars and light trucks by 2016.

earlier related report
Obama unveils 'historic' car efficiency standards
President Barack Obama Tuesday unveiled "historic" efficiency and greenhouse gas standards for US cars, forging a rare moment of unity between auto firms and environmentalists on climate change.

"For the first time in history, we have set in motion a national policy aimed at both increasing gas mileage and decreasing green house gas pollution for all new trucks and cars sold in the United States," Obama said.

The president gathered 10 auto industry chiefs, from crippled US firms to foreign giants, plus union bosses and environmentalists, to celebrate the deal forged by his administration in secret talks over the past few weeks.

Automakers will be forced to dramatically boost the efficiency of cars and light trucks by 2016, in a move that will save 1.8 billion barrels of oil and achieve cuts of 900 million metric tonnes of greenhouse gas emissions.

The fleet average fuel consumption for US vehicles will be raised to 35.5 miles per gallon by 2016 (15.44 kilometers per liter) from the current 25 miles per gallon -- four years sooner than required by current US law.

Most passenger cars must reach 39 miles per gallon by 2016 and light trucks must satisfy fuel consumption regulations of 30 miles per gallon.

The program, which begins with car models made in the year 2012, boosted Obama's new climate change policy and represented early vindication for his political creed of change, unity and coalition building.

"In the past, an agreement such as this would have been considered impossible," said Obama.

"That is why this announcement is so important, for it represents not only a change in policy in Washington, but the harbinger of a change in the way business is done in Washington."

California Governor Arnold Schwarzenegger, who led a fuel efficiency drive in his own state which was thwarted by auto giants, paid tribute to Obama's deal making skills.

"Very quietly, he had everyone negotiate and everyone stay quiet and things move forward, and he was very successful," he said.

"This has been a huge victory for the state of California."

The announcement, greeted with delight by environmental campaigners, coincides with an effort by the White House and Obama's Democratic allies in Congress to pass a landmark bill aimed at combating global warming.

Cars will be more expensive because of the new regulations -- by up to 600 dollars per vehicle on top of the 700 dollar price hike expected with the latest Corporate Average Fuel Economy (CAFE) rules already passed by Congress.

However, drivers will likely be able to recoup the cost as they will have to buy less fuel over the vehicle's lifetime.

The new policy will give more certainty to struggling automakers like Ford, General Motors and Chrysler, which have been battered by the financial crisis and are working to refit vehicles by streamlining the regulatory process.

Ford CEO Alan Mullaly said he was "absolutely pleased" with the new regulations, which he said would help drive development of sustainable vehicles which run on new generation energy sources.

New GM CEO Fritz Henderson, said that harmonizing various regulatory standards "will benefit consumers across America."

"Energy security and climate change are national priorities that require federal leadership and the president's direction makes sense for the country and the industry," he said.

White House spokesman Robert Gibbs denied that the billions of dollars the government is doling out in bailout money to GM and Chrysler had forced them to accept government demands to sign up to the program.

Environmental campaigners hailed the tough new standards.

"Today's announcement is one of the most significant efforts undertaken by any president, ever, to end our addiction to oil and seriously slash our global warming emissions," said Sierra Club executive director Carl Pope.

Ten car firms and the United Auto Workers Union (UAW) signed up for the deal, on the grounds it would provide a nationwide and industry-wide standard for auto efficiency requirements.

The high-powered guest list at the White House event included Mulally; Jim Lentz, president of Toyota's US arm; GM's Henderson; John Mendel, executive vice president of American Honda Motor Co.; Chrysler CEO Bob Nardelli; Dieter Zetsche, Chairman of Daimler AG and head of Mercedes-Benz Cars; and UAW President Ron Gettelfinger.

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