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 “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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