The rise and fall of gas prices over the last six months has made American car and truck buyers even more fickle than usual.
Though sales of small cars picked up for a while when gas topped $3, enthusiasm for compact vehicles evaporated swiftly as pump prices fell back into the low $2 range. To long time market observers, it's a familiar story; Americans will steer clear of small cars unless they absolutely have no choice. As soon as the fuel price pressure lets up -- and gas prices are now at their lowest point this year -- vehicle buyers will start eyeing larger cars and trucks. This scenario has happened before and it appears to be playing out again.
This time, however, the situation is more complex. As well as offering small cars, the auto industry has created a new breed of fuel efficient vehicles -- hybrids -- to entice people into showrooms. In fact, hybrids -- most notably Toyota's Prius -- were catching on with consumers well before gas peaked at over $3 earlier this year. Slowly and somewhat reluctantly, a few automakers other than Toyota have joined the hybrid party with a variety of models. Companies were slow to embrace hybrids because of their technical challenges and the major financial commitment involved.
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