American automakers are hurrying to get better-quality compact and subcompact cars on American roads, but now industry analysts are speculating that this might create an oversupply of small vehicles.
Ford Fiesta
Ford's Fiesta sedan and five-door hatchback are at last heading to the U.S.; Chevrolet's Spark will sometime afterward. This is to say nothing of the upcoming Ford Focus, Fiat 500, Chevrolet Cruze, Mazda2, and others on the way. There's simply not as much flexibility to attach incentives to smaller vehicles as with higher-profit trucks and SUVs, but that's exactly what might happen if gas prices remain constant.Ford Focus European 5-Door
We've already seen that the price of gas directly affects the sales of hybrids and other fuel-efficient small vehicles. Well, a gallon of regular gas is nearly the same price today as it was five months ago, according to AAA.Increasingly strict U.S. government regulations are forcing automakers to pay greater attention to more efficient small cars. "Extreme pressure to channel smaller vehicles in the market due to CAFE and emissions standards will raise incentives and lower profitability," said an analyst from CSM Worldwide to Automotive News.
source: motortrend
