Automakers, already flirting with bankruptcy, find themselves in another bind when introducing hybrid and fuel-efficient models — consumers aren’t buying if they can afford the gas.
The Detroit News reports that small car and hybrid sales surged last year but have since fallen about 2 and 12 percent, mirroring dropping gas prices.
Lower gas prices hinder investment in smaller vehicles and more efficient technology — yet in order to meet new emission standards being considered by Congress, automakers will need to spend billions on green technology.
Auto sales have hit a 27-year low, and companies are deciding whether to spend limited resources on electric, hybrid, and fuel cell technology that might not sell.
By 2012, the North American hybrid market is only projected to increase to 5.3 percent.
Accordingly, some automakers are focusing on designing more fuel-efficient and powerful gasoline engines, which they hope will amount to higher sales.
“Carmakers are caught between feds, buyers”
Detroit News, February 10, 2009