Will the trend toward economy-size car models lead Americans back to buying smaller-sized cars?

Yes

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by professional council

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It is important that we look primarily at two factors that contribute to market trends. Market demands and what the market has to offer to meet those demands. What automobile manufacturers have always had, specifically American manufacturers, were a lot of big cars to offer their consumers. For along time American manufacturers set trends in the industry, and those trends focused on large vehicles. To this day the best selling automobile in the United States is the Ford F-150, a pickup truck.

It only seemed natural that the American automobile industry, in an effort to boost slowing sales in the late 80's to early 90's, invented what we now know as the SUV. This was also aided by the Clean Air Act of 1990 whereby SUV's and trucks were not required to meet the same emissions or fuel efficiency standards as cars until the model year 2004. Thanks to heavy lobbying, the Clean Air Act of 1990 allowed the industry to produce what were essentially trucks with a car's interior, thus spawning the age of the SUV.

Let's not forget American's have always loved big cars. Since the suburbanization of America, where the masses left cities in their fresh Detroit metal, the notion has been bigger is more and ultimately better. Think of the icons of classic American automobilia, the 1953 Cadillac Eldorado, the 1961 Lincoln Continental, the Mustangs, Camaros, GTOs, Chargers and Impalas of the mid 60's. All large vehicles, all V8 powered (the most popular Mustang to this day, however, is that which is powered by the 6 cylinder), all Detroit steel. A big country needs big cars, of course. This was clearly the logic behind the concept of the SUV. Facing pressure from foreign manufacturers who were building smaller more economical cars, the American auto industry decided to confront them head on by building even larger, even more powerful automobiles than it had before. After all that was how the American auto industry had grown so powerful in the past. They would stick to their guns and create an entirely new kind of automobile to be consumed by the American public.

Here lies the topic of discussion: Will Americans continue to buy large cars, trucks and SUVs? The answer is no. The average consumer will no longer be force fed large SUVs. It's clear that time is over, especially with Nissan dealerships offering 2 for 1 deals on their SUVs, and GM dealerships giving the lucky buyer of a new car or truck 50 shares of GM stock; the problem is across the board. GM and Ford are being hit the worst by this because they invested so much into the SUV during the 90's, and for a time it worked. It worked so well that it created a premium luxury SUV segment. Those manufacturers who entered the luxury SUV segment, however, made a critical observation that would be crucial to their success; their target customer was more affluent and would pay the cost no matter what the economic situation. Hence why Porsche now has the buying power to acquire Volkswagen, a company nearly ten times its size, something it couldn't even imagine five years ago when it released the Cayenne SUV . All thanks to Americans who created the SUV and mismanaged the concept, not realizing that it would be impossible for the average American to afford it in the long term.

So naturally there will still be those among us who will continue to fill up their behemoth Cadillac Escalade, Porsche Cayenne, Hummer or Mercedes Benz GL450 at $100 or more per visit to the pump. But those who commute 10-20 miles, or more, are beginning to see that it is no longer financially responsible, in most cases no longer financially feasible, to drive a large car or SUV. The alternatives for the time being are large cars with smaller engines, or smaller cars, some of which also happen to incorporate hybrid technology. However hybrid technology is expensive, and difficult to package so there's been the notion of putting these in premium vehicles like Lexus has, in order to spur further development of hybrid technology. The intended result being that hybrid technology can fit cheaply and easily into smaller more compact cars. Thats a trend in the auto industry, or rather the direction that the industry is headed. However its been shown, on numerous occasions that hybrids are not nearly as efficient as some compact gas or diesel powered automobiles. Unfortunately, thanks to heavy lobbying by the oil industry the low sulfur diesel needed to power economical, eco-friendly and powerful diesels motors is unavailable to purchase, and subsequently neither are the abundance of small super efficient cars that run on it.

So as Americans feel the crush of rising fuel costs on their bank accounts, there appears to be shift, on some levels, as to how the market will respond to demands being made by the consumer. The trends in the American automotive industry are no longer being dictated by big auto manufacturers, but rather by the American consumer. Low sulfur diesel is slowly being introduced nationwide and so begins the trickle of new diesel powered automobiles. Chevrolet recently announced it will be releasing its highly anticipated compact "electric car" (it's really a hybrid) for 2010. In the meantime, in order to ease the discomfort created by the skyrocketing cost of fuel Americans will have to buy smaller cars. Or do the impossible and drive less. Public transportation anyone?

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