Small cars make a comeback due to high gas prices
In the late 1990’s, during the peak of America’s S.U.V. craze, only one in every eight vehicles sold was a compact or subcompact car. Today, in the United States, that number has increased to around one in five. Additionally, four-cylinder engines recently surpassed gas guzzling six-cylinder engines in popularity.
This trend towards smaller and more fuel efficient cars is not surprisingly attributed to the high cost of gasoline. This is bad news for the big American car makers, who have enjoyed larger profits from the sales of pick-up trucks and S.U.V.s than from smaller cars. Naturally, the increased demand for small cars has also resulted in a decrease in S.U.V. sales, which have gone down by 25% this year. The automaker most hurt by these trends is, of course, G.M.
While a healthy American car industry would be a good thing for our country, decreasing our massive consumption of oil would be even better. The trick will be to see if our domestic car manufacturers can adjust to these changing market conditions to take advantage of the consumers’ shifting demands (the way a capitalist system should work), or if they are just too big and bloated to make the necessary changes.
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