The big three Detroit automakers are in peril because gas prices have shifted consumer demand from GM, Ford and Chrysler's once-profitable large SUVs to small, fuel-efficient cars. What are American automakers doing to catch up to market demand?

Motor Trend reports, "The Detroit Three are ready to make more cars than trucks again -- the market has already dictated that -- and the C-segment (Civic, Corolla, Focus, Golf, etc.) is the next big thing, with more refined, better-equipped models on the way."

General Motors may be best-prepared, in terms of upcoming models, to turn around its fortunes. The General is developing a new small car that reportedly will get 40 mpg or better. The car has been spotted by spy photographers. Motor Trend says it features "the now-signature Chevrolet horizontally split grille with "fierce-eye" headlamps and a rakish, coupe-like four-door roofline."

GM has also invested heavily in the Chevy Volt, a midsize hybrid-electric car with a sporty profile that reportedly will reach showrooms in 2010.

While waiting for the new cars to arrive, the General has boosted the mileage of most of its lineup for 2009.

Ford generated significant buzz on the auto show circuit this year with its new Fiesta subcompact. The Christian Science Monitor reports, "The launching of the Fiesta subcompact, to be available for export to the US in 2010, is part of Ford's effort to tap a new market, after truck sales have slowed." When it appeared at the 2008 Geneva Motor Show in March, Autoweek wrote of the Fiesta, "If Ford gets this car right, it could be the product that brings the Dearborn automaker back from the brink."

If the Fiesta doesn't save Ford, the next Focus may. The automaker plans to bring the European version of its small car to the U.S. for the 2010 or 2011 model year. Members of the automotive press who've driven both the U.S. and European models of the Focus have long considered the Euro-spec compact a superior car, better positioned to compete with Honda's Civic, the new best-selling vehicle in America.

Chrysler, meanwhile, is banking on partnership with an Asian rival to develop its next small car. Motor Trend reports, "A Chrysler/Nissan car -- using the Nissan Versa platform…and probably based on the Dodge Hornet concept, comes in '10 as a 2011 model."  The Hornet concept was a boxy, aggressive hatchback that somewhat resembled a Scion xB or Nissan Cube. Canada's Driving reports, "This vehicle will feature a distinctive body from the Versa…and be positioned as a premium subcompact with many customizable options, targeting the subcompact market in a similar way to the Mini Cooper."

Bringing the new cars to market won't be simple, or quick. The AP reports, that none of the "new compacts will reach showrooms for two years, and when they do, their profit margins will be far smaller than those from trucks and SUVs. … Automakers know they'll have to make it in the meantime with models already on the market or ones that are planned for the next year."

When they do arrive, they will be more expensive than current compacts. The Christian Science Monitor notes, "Sticker prices are actually going up, as automakers adjust to higher costs for things like steel. And new hybrid technologies come at a cost." John Wolkonowicz, an auto analyst at Global Insight in Lexington, Mass, tells the Monitor, "This whole situation is simply going to cost consumers money."

But Roland Hwang, vehicle policy director for the Natural Resources Defense Council, sees a light at the end of the tunnel. "There's no reason why Detroit can't emerge leaner, stronger, more fuel efficient and more sustainable from a business and environmental perspective," he told the AP. "Fuel efficiency is not just because you want to help save the world. It's because you need to save your company."

Research the most fuel-efficient small cars and hybrids with U.S. News' car rankings and reviews.

 

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