Small Cars in America, What's the Story?

American consumers aren’t buying many vehicles at all, let alone the small cars and hybrids that are clogging dealer lots and creating big inventories for the ailing industry. That S.U.V. in the garage isn’t the costly liability it was last year, when gas prices hit $4 a gallon. (For a prescient view of such a pendulum swing, see this August 2008 analysis by our colleague Andrew C. Revkin at Dot Earth.)

But the American auto industry, under pressure, has invested heavily in the small-car and hybrid market. So it should probably not be a surprise that auto industry leaders like Alan Mulally of Ford have called for higher gas taxes, an idea Detroit once abhorred.

Putting aside the political difficulties of raising gas taxes during a recession, should government act to give consumers strong incentives to drive less and accept fuel-efficient cars for the long haul?...Continued