The company's didn't circumvent anything, they followed the regulation. The regulation was the problem. Car were getting better emissions and mileage, and emission standards were getting better. The law as written made selling small cars less profitable than selling large ones. So companies naturally went to selling large vehicles.

More regulation could have helped in this situation sure, but they didn't do that. In the end they caused a generational problem instead of admitting they were wrong and changing the rules