High gas prices driving small car sales
Keeping up with the Joneses may soon mean recycling the Hummer and putting a 4 banger econobox in the driveway. The New York Times reports that soaring gas prices are making compact cars popular again, with1 in 5 vehicles purchased in April falling into the compact or subcompact category. That's an increase from 1 in 8 only a decade ago.
Experts predict that with gas prices unlikely to drop soon - well, ever - the era of the massive SUV may be over. This is bad news for US automakers, who in spite of years of warning from economists, environmentalists, and peak oil conspiracy theorists, have failed to develop a strong line of small cars to match overseas manufacturers like Toyota and Honda.
The trend proves again what we already knew - that people respond to events that hit their wallet, not their conscience. If gas prices hit 10 bucks a gallon, look for strong growth in sales of bicycles, in-line skates, and walking shoes.
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