* Several new small cars slated for U.S. market in 2010
* With gas prices steady, small car rush may pressure margins
By Soyoung Kim
DETROIT, Dec 8 A new lineup of small cars
slated for U.S. showrooms next year may create an oversupply of
compact vehicles in the U.S. market at a time when gas prices
remain stable, an industry forecasting firm said on Tuesday.
Automakers including General Motors Co [GM.UL] and Ford
Motor Co (F.N) are rushing to launch new fuel-efficient small
cars and electric vehicles in 2010 to meet tighter fuel economy
standards in the United States and attract buyers that have
gravitated toward smaller cars.
However, if gas prices trend steady from today's levels of
under $3 per gallon, "Extreme pressure to channel smaller
vehicles in the market due to CAFE and emissions standards will
raise incentives and lower profitability", said Michael
Robinet, vice president of forecasting at CSM Worldwide.
Automakers are required to raise their fleetwide average to
35.5 miles per gallon by 2016 under a U.S. law aimed at cutting
carbon emissions and spurring development of fuel-efficient
Globally, automakers and governments are estimated to spend
about $428 billion a year by 2020 under a worldwide push for
promoting greener transportation, CSM said.
Increasing competition in the subcompact and compact
segments, which have long been dominated by Asian automakers,
may also hamper Detroit automakers' goal of making money on
selling small cars, CSM said.
Craig Cather, president and chief executive of CSM, said,
"It is very possible that U.S. automakers will not achieve
their objectives of selling small cars at a profit."
GM plans to launch its Chevrolet Cruze small car in the
U.S. market in the third quarter of 2010, a vehicle it said was
capable of reaching 40 miles per gallon in highway driving. GM
also aims to launch the Chevrolet Volt electric car at the end
of next year.
The No. 1 U.S. automaker is counting on a series of
upcoming fuel-efficient vehicles like the Cruze and the Volt to
revitalize its lineup as it tries to reverse a long-running
slide in market share after emerging from a government-financed
bankruptcy on July 10.
Ford is set to roll out the Fiesta small car in the United
States by early summer and a redesigned Focus compact car later
in 2010 -- which the company has touted as two key U.S. car
launches next year.
Chrysler Group LLC, under the management of Italy's Fiat
FIA.MI, also plans to bring the Fiat 500 subcompact to the
U.S. market at the end of 2010.
The trend toward smaller, more fuel-efficient vehicles will
continue as the U.S. economy recovers and gas prices start to
rise, CSM said. But a gradual increase in prices is not sufficient
enough to drive demand for such vehicles, it added.
"We need a little bit more that that," Robinet said, citing
gasoline taxes or another oil shock as possible catalysts for
(Reporting by Soyoung Kim; Editing by Phil Berlowitz)