New cars on a low-fuel diet

With oil prices soaring above $50 a barrel and terrorism surging in the Middle East, it seems appropriate that 2005 becomes the year Americans finally give up big SUVs and turn toward more fuel-efficient vehicles.

From gasoline-electric hybrids to diesel-powered cars to gas-saving technologies in conventional cars, bigness is out. Fuel-sipping is in.

That doesn't mean Americans are returning to the small econo-cars of the 1970s. Instead, they're demanding slightly smaller and more fuel-sipping versions of the practical vehicles they're already familiar with - from small SUVs to the Honda Accord.

"I think there are a lot of people who simply resent paying $2 or $2.50 a gallon when they fill up. It has a psychological effect," says Ron Cogan, publisher of the Green Car Journal in San Luis Obispo, Calif. "It speaks to some people's sense of energy diversity and energy security: The less fuel they have to buy to drive their cars, the better they feel that we're not having to buy fuel from unfriendly places."

Gasoline prices would have to stay above $2 or even $3 a gallon for more than six months for consumers to feel the economic pinch, according to most US auto-industry studies. But already, consumers are expressing more interest in fuel economy than they have in 20 years. In a May 2004 study for the National Renewable Energy Laboratory, for example, 22 percent of respondents rated fuel economy as the most important factor in their next car-buying decision, more than double any year since 1983.

"Fuel economy is one of the strong themes of this model year, influenced most by high gas prices at the pump," says Rik Paul, automotive editor of Consumer Reports in East Haddam, Conn. "When gas prices go up, so does the interest in more economical vehicles. In the past, when fuel prices go back down, that interest wanes."

Indeed, the 2005 model year is shaping up as a key test for the hybrid, says auto analyst Jim Hall. Is it a faddish purchase for people who want to stand out by owning a car that looks different? Or does it fill a deep yearning for new technology that uses less gas? "If this technology really succeeds, in five years we'll just consider it an [engine] option," Mr. Hall says. "That's what really scares a lot of people in the industry ... because they're not ready."

Already, hybrid-leader Toyota has announced it will nearly double US imports of the popular Prius to 100,000 starting next spring. The automaker plans eventually to sell 300,000 hybrids a year in the US, about the annual sales of the popular Ford Expedition.

It's not just hybrids that mark a turn toward efficiency. Diesel-powered vehicles are also seeing a renaissance, with five new models coming on the market this year. (See story, left.) Two - the new Touareg and Passat diesels - are from Volkswagen, the only company that has sold diesels here consistently since 1987. Other new diesels include the Mercedes-Benz E320 CDI, for $49,075, the Jeep Liberty CRD for $25,795, and the redesigned Kia Sportage, due out this spring at an undisclosed price.

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