A grim cloud of despair may be enveloping the US auto industry but it has contained a silver lining for makers of compact fuel-efficient cars, according to exhibitors at the Los Angeles Auto Show.

Cars that would once have been regarded with scorn in the United States, where big, hulking gas guzzlers were the traditional kings of the roads are now seen as a rare bright spot amid the industry gloom.

Leading the charge is the smart fortwo, the pocket-sized two-seater measuring only 2.7 metres which has sold 21 000 units since going on sale in the United States in January, the car's importer said on Thursday.

"The key to Smart USA's success has been entering the market with the right car at the right time," said Smart USA president Dave Schembri.

"The smart fortwo quickly has become a preferred vehicle solution for many American consumers, demonstrating that the micro-car is not a fad, but is clearly a trend," he added.

The popularity of small, fuel-efficient vehicles has increased after years of soaring petrol prices. But even allowing for a recent slump in US pump prices, industry analyst David Champion of Consumer Reports believes the trend towards more economical cars is here to stay.

"We're seeing a lot more in terms of change in the industry," he told AFP.

"The five dollar gas prices we saw in the summer really scared a lot of people. Yes it's come down now, but I don't think anybody thinks that it's going to stay that low."

Japanese invasion

Japanese car makers are all well-positioned to capitalise on the rise in smaller cars, with Honda championing its Fit model, Nissan its Versa and Toyota the Yaris, all introduced in the past three years.

"Obviously, small cars are moving a lot faster from the showrooms," said Toyota's product communications manager Chen Ming-Jou. "Having a wide range of products obviously helps us in these times," she added.

The "Big Three" US auto makers — GM, Ford, Chrysler — have seen their share of the market shrink through their failure to offer cars capable of rivaling the Japanese models.

In an attempt to redress the balance, Ford will soon begin importing its popular Fiesta model, which are sold widely in Europe but remain largely unknown in the United States.

Simon Sproule, vice-president of communication with Nissan, said American consumers are changing their habits and manufacturers need to adapt to reflect the shift in tastes. "Rather than lose the business, we have to have more cars that customers can choose from, and if that means smaller cars, we've got to provide them," he said.

A changing market

Car sales figures reflect the changing face of the US market. While sales slumped in October to their lowest level since 1982 as the effects of the global credit crisis too hold, numbers for small cars such as Toyota's Scion, have been encouraging.

"We're right on track," said Scion Motors' official Steve Hatanaka. "We sold 120-130 000 of them in one year."

Suzuki, meanwhile, have recorded rising numbers that a rival like GM could only dream of, with sales of its SX4 registering a 120 to 130 percent spike this year according to company spokesperson Jeff Holland.

Nissan official Sproule said Europe, Japan and the United States "are converging in taste, smaller cars, economical engines."

In Los Angeles this week, Nissan unveiled its Cube model, a boxy compact car resembling a refrigerator which goes on sale next year.

"The Cube is also to come at the right time," Sproule said. "People are still buying cars, it might be a bit of fun in a depressed market."

On a neighbouring stand, South Korea's Kia Motors, displayed its compact Soul five-door hatchback. "The reaction has been phenomenal," said Kia spokesperson Alex Fedorak.

"The Soul is a vehicle that looks small, but inside there's a lot of room. You need to approach it with a different mindset. Do I still need this gas guzzler, or can I have the same room in a smaller car?"

AFP