Small cars in demand as gas prices rise

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In an era of fast rising fuel prices, the US auto industry has made small cars a central part of its strategy- outdoing their long time Japanese rivals. By focusing on small cars and de-emphasizing the gas-guzzlers that had long sustained the industry, General Motors and Ford in particular are preserving jobs and positioning themselves to prosper.

“There is a less-is-more mentality,” said Jeremy Anwyl, chief executive of the auto research site Edmunds.com. “The market demand and receptivity for these vehicles just didn’t exist four or five years ago.” Of the 1 in 4 vehicles sold in the US last month – was a compact or a subcompact car, compared with the 1 in 8 a decade ago. Of the small cars sold in April, about 27 percent were American made, compared to a 20 percent a year earlier.

This shift and emphasis on smaller vehicles haS proven to be a necessity for the recovering of several US auto companies. Rising fuel prices have prompted a steady migration away from bigger vehicles since 2008. Industry experts say the shift is likely to be a permanent one, as consumers flock to small cars with the same features available in the larger counterparts.

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