Major car manufacturers from around the globe have agreed to increase the fuel efficiency of vehicles sold in the US following a deal with the White House.

Automakers will double the average fuel economy of the vehicles they sell to 54.5 miles per gallon (mpg) by 2025.

Taking effect from 2017, the measure has the backing of General Motors, Ford, Toyota, Chrysler, BMW, Honda, Hyundai, Jaguar Land Rover, Kia, Mazda, Mitsubishi, Nissan and Volvo.

"This agreement on fuel standards represents the single most important step we've ever taken to reduce our dependence on foreign oil," said President Obama.

"Most of the companies here today were part of an agreement we reached two years ago to raise the fuel efficiency of their cars over the next five years. We've set an aggressive target and the companies are stepping up to the plate."

The deal will save motorists an average of $8,000 a year per vehicle and a total of 12 billion barrels of oil, according to the US Environmental Protection Agency (EPA).

It builds on previous plans to increase fleet-wide fuel economy to 35.5 mpg by 2016.

Under the terms of the agreement, passenger cars will have to improve efficiency by five per cent a year, while pick-ups and light trucks will do so by 3.5 per cent to begin before increasing to five per cent.

The higher fuel economy standards are expected to drive innovation in alternative engines such as hydrogen fuel cells that use platinum.

EPA administrator Lisa Jackson noted that American automakers are now responding to consumer concerns with plans for "some of the most fuel efficient vehicles in our history".

To assist the roll-out of advanced technologies, the EPA and the National Highway Traffic Safety Administration said they are considering incentives for electric vehicles, plug-in hybrid electric vehicles, and fuel cell vehicles.

Sources:

GM, Ford, Toyota Agree to Double Fuel Economy to 54.5 MPH on U.S. Vehicles (29/07/11)

President, automakers hail new fuel efficiency pact (29/07/11)

Analysis: Gas engines at center of fuel efficiency drive (31/07/11)

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