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Gas Prices May Push U.S. Toward More Efficient Cars

• Pricing the Smart ForMore would have been a problem. To Americans, smaller generally means less expensive. That's because we tend to equate value with size, as opposed to matching value with function and the most desirable outcome -- better fuel economy -- under given circumstances, such as rising gasoline prices. But unfavorable monetary exchange rates and shipping costs could easily have pushed the price of the Smart ForMore above the prices of its larger and more established rivals.

• The timing was bad all around. It does not matter if the SUV is big or small, because the term "SUV" itself is a pejorative conjuring up an image of bigness and waste -- not exactly the image you want, not even in America, when regular unleaded gasoline prices are moving toward $3 a gallon.

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• The Smart ForMore, as the initial Smart U.S. vehicle, would have undermined Smart's uniqueness and thereby harmed its brand value. It matters not that the City Coupe and its other two-seat iterations have not earned a penny since their introduction in 1998. What matters is that they have stirred consumer imagination, and that they are selling, albeit not yet at a profit. With a few fixes -- a slightly larger wheelbase, better automatic and/or manual transmissions and a tad more cargo room -- they could become as much of a hit as the now-famed Mini Cooper, or even bigger.

That is what DaimlerChrysler now plans to do with the Smart two-seater in the U.S. market. It is going to make the car a bit larger but do nothing to destroy its urban funkiness. It will meet all existing U.S. safety and tailpipe emissions rules, of course; and, yes, adhering to those tougher standards will mean an increase in price.

But the Smart City Coupe and its mini-two-seater siblings now have something going for them that they did not have before -- an American reality check on spending at the gas pump. Growing world oil demand and consumption mean we can say goodbye to the days of dirt-cheap gasoline here.

According to recent research by the editors of Kelley Blue Book, an internationally recognized vehicle product and market research journal, some Americans are beginning to respond to that changing reality.

"Over the last five months [ended March 16, 2005], we have seen a slow and steady decline in large SUV consideration," said Rick Wainschel, KBB vice president of marketing research. "Shoppers have been telling us that even small increases in gas prices will lead them to consider more fuel-efficient models."


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