Small is beautiful for carmakers

PARIS (Reuters) – Carmakers will make fuel efficiency a sales mantra at the Paris car show next week when they tout new models to customers whose numbers and budgets have shrunk in the face of financial turmoil and high oil prices.

Tighter finances and new emissions rules look set to favour the sale of smaller models and engines, while the industry’s revenue base may also be impacted by slowing growth in emerging markets, until recently a welcome outlet for European carmakers faced with a decline in maturer markets.

… “Europeans will continue to drive cars. The fuel efficiency of those cars will change, in part because of high oil prices, and because regional governments are almost universally increasing CO2 taxes,” Tyndall said.

Technological developments allow for greater fuel savings in the coming years compared with current models, so the impetus for drivers to buy new cars will increase.

Reuters UK