Automakers Pushing Smaller Cars, But Are Consumers Listening

Conventional wisdom states that one of the main reasons US automakers fell into financial peril over the past decade is because they were behind the times. They don’t offer what the people want. They don’t offer any smaller vehicles. No hybrids, no eco – friendly automobiles. No low gas consumption cars.
Well, if the current car show in Detroit is any gauge, they got the message. Most of the vehicles they are spotlighting are the smaller, modern, high mileage and environmentally friendly cars. The Chevy Volt just won car of the year at the Detroit Auto Show.
They’ve gone out of their way to come up with automobiles that comply with the increasing CAFE standards that require cars to meet higher fuel efficiency standards. After fuel prices went up dramatically in 2008 due to higher oil prices, industry experts predicted there would be a seismic shift in Americans driving habits. Forecasts were for everyone to sell their SUV and Trucks and to finally make the move to hybrid and fuel efficient cars.
While there has been a trickle of people sticking their toes in the water, most American consumers appear to be set in their ways. They just don’t seem to be ready yet to forsake the spaciousness of their roomy SUV’s  and trucks. And who can blame them? You certainly can’t get your family around comfortably in a compact car.
And what about getting in an accident? If you are unfortunate enough to get in an accident with one of those compact cars, you are not only much more likely to spend more when the car is up on the Auto Lift due to damage, but you are also much more likely to get injured.
As we pointed out in a previous post, sales of trucks and SUV’s were up 30% in the USA in 2010, while hybrid sales were down. Industry analysts do predict rising fuel costs for 2011,  so it remains to be seen at what point the American driver will reach his breaking point when it comes to fuel efficient cars.
If there is a dramatic increase in gasoline prices, Detroit is much better positioned than in years past to handle it due to it’s wider range of offerings in the small car and alternative fuel categories.