Well it's a closed loop system.
So ... if consumers keep buying the large gas-guzzlers then the manufacturer is fined for failling to meet CAFE> So the manufacturer has to do 1 of 2 things
1 ... Actually produce cars with better fuel consumption
( the hoped for solution )
or
2 ... Drop prices of best consumption cars in current range to increase sales
( of course then factories don't make profits )
and of course, there is always the "find the loophole" solution and thus was born the SUV market
Hence why I suggested selling the Tata Nano thing woudl work out. The buyer spends $15,000 on a Cadillac what's-it-called and for another $1 gets a Nano. They make $5,000 on the Cadi, lose $1000 on the Nano and so come out $4000 up .... BUT the Nano makes 60mpg, the Cadi 10mpg and so by selling one for one they actually meet the CAFE standard. The fact that the Nano is NEVER driven and the REAL consumption by the consumer in his Cadi is 15 mpg. Thus trying to control consumer policy fails again ..the ONLY way to control consumer purchasing is to legislate or tax it directly .... a solution NEVER acceptable in the US