Smaller Cars Could Bite The Dust Amid Low Gas Prices

Auto industry observers believe that automakers' robust financial prospects could come at the expense of their smaller models.

Mnet 191050 Dodge Dart

Auto industry observers believe that automakers' robust financial prospects could come at the expense of their smaller models.

The Detroit Free Press reports that projections show a steady profit for automakers in large part due to the sales of bigger vehicles.

The size of cars sold is strongly linked to profit margins, and drivers are increasingly turning to crossovers and sport wagons instead of compact or subcompact cars. The higher-riding, modestly larger crossover gained increasing favor in the marketplace for years, but sharply lower gas prices exacerbated that shift in recent months.

Last month, the Free Press reports, crossover and sport wagon sales climbed by more than 10 percent while small car sales declined by more than 11 percent.

As a result, some automakers are cutting ties with the smaller models that were considered essential in the wake of the recession and higher gas prices.

Toyota last week announced plans to fold its Scion brand entirely, while Fiat Chrysler CEO Sergio Marchionne said recently that his company would soon stop production of the Dodge Dart and Chrysler 200.

Ford, meanwhile, last year announced plans to relocate production of smaller cars — likely to Mexico — while GM officials vowed to closely evaluate investment in its new Malibu and Cruze models.

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