Quote:The European car industry has always been far more regulated than the American and it has always been ahead in terms of MPG. Japan's fantastic track record with MPG and squeezing ever available HP out of an engine is the direct result of government regulations. The same for Japan's ability to make small cars which is the direct result of government regulations regarding parking spaces. The free market is nice but a company will usually do the bare minimum to innovate. Innovation is a reaction to restriction. 

 

Europe is mostly diesel, American diesel vehicles get just as good of MPG as European diesel vehicles. Not to mention the regulations in many European nations drive the cost so high that private vehicle ownership is no where near what it is in America. Many parts of Europe use strictly public transportation.

 

The reality is regulation doesn't lead to innovation it leads to individuals and companies looking for another way to perform the task.

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