Efforts to reduce carbon dioxide (CO2) emissions in the face of global warming are likely to greatly alter the face of car industry. Whether automakers can produce cars with low CO2 emissions, such as hybrid or electric cars, will be a key to their survival. This consideration is clearly behind the recent agreement by Nissan Motor Co., Renault SA of France and Daimler AG of Germany to form an alliance.

The European Union's plan to introduce strict restrictions on CO2 emissions in 2012 appears to have caused a sense of crisis for Daimler, which mainly relies on sales of large luxury cars. Under the EU plan, each carmaker must meet the emission standard of no more than an average of 130 grams of CO2 per kilometer driven by each car.

Fines for firms in violation will rise exponentially. A penalty of 5 euro per vehicle will be applied if the emission rate is 1 gram above the standard. The fine will increase to 20 euro per vehicle for an excess of 2 grams, and 235 euro for an excess of 5 grams.