October 11, 2008 in City

WHEELS

 

Ford Motor Co. CEO Alan Mulally jumped into the passenger seat of the tiny Ka city car his company had just unveiled at the Paris Auto Show.

“The future of the auto industry is on display at the Paris Auto Show, and the future is now,” he said, gesturing to nearby vehicles so enthusiastically that he threatened to knock a window out of the little two-door Ka.

Mulally speaks for an entire industry that believes Americans are ready to buy more small cars and pay more for them.

For decades, American and European automotive tastes have diverged. Americans reveled in cheap gas prices and big vehicles with big engines. Europeans, who have lived with $4-a-gallon gas for years, built stylish, fuel-efficient little cars that offered more comfort and features than those the Detroit Three derided as econoboxes.

But even in the face of rising gas prices and fuel-economy requirements, some analysts question how big Americans’ taste for small cars will be. “There’s a history of knee-jerk reactions to oil crises,” said analyst Rebecca Lindland of Global Insight in Lexington, Mass. “When gas prices stabilize, we may see a return to midsize vehicles. There’s a risk manufacturers may overcorrect and find themselves with too many small cars.”

General Motors Corp. and Ford both unveiled key players in their future lineups of global small cars in Paris last week. They already build excellent small cars in Europe and appear committed to making their U.S. models just as good. That would be a major change. The automakers’ U.S. operations traditionally treated small cars as money-losers they had to build to meet government fuel-economy decrees. The Ka, which Ford developed with Italian automaker Fiat, replaces a popular model that sold 1.5 million cars over its lifetime. Ford hasn’t said whether it will sell the Ka stateside, but the company is considering whether it may need a car priced below the Fiesta subcompact it will sell in 2010.

GM put the full power of its global engineering and design behind the Chevrolet Cruze compact sedan that debuted in Paris last week.

The roomy and attractive Cruze will offer more passenger space and better fuel economy than any compact on the road when it goes on sale in spring 2010, GM promised.

Detroit Free Press

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