U.S. auto giants race to go small

•Honda announced a month ago that it will launch a new gas-electric hybrid model, like Toyota's Prius, in 2009. It also plans new hybrid versions of the Civic and Fit, and is ramping up production of the gas-only Fit. A key Honda goal, according to news reports: keeping the extra cost of the hybrids below $2,000 per car.

•GM is pushing to launch its new Chevrolet Volt by 2010, a plug-in hybrid to compete against hybrids whose batteries are charged while in motion. "An extended range electric vehicle like the Volt will cost about two cents a mile for electricity from the grid," GM executive Troy Clarke said this month. A new fuel-efficient compact car will launch with Ohio-based production. One GM specialty: "Mild hybrids" that boost mileage by a little less than rivals but at a lower price.

•Ford said last week that it is adding a third shift at a Kansas City plant making its Escape hybrid and Mercury Mariner hybrid. And it said the European Ford Focus and Fiesta, next-generation small cars, will begin production in North America in 2010.

•Toyota is also ramping up its hybrid production – including plans for a plug-in model. The Prius and hybrid Camry have made Toyota No. 1 in the industry's hybrid sales, with 1.4 million customers as of March.

Another fuel-saving option for consumers is diesel. Mr. Omotoso says diesel's fuel economy can be nearly one-third better, but the fuel's price has also been approaching $5 per gallon. Volkswagen's 2009 diesel Jetta is one option for consumers.

Flashier advances, such as fuel-cell vehicles, may not be available on a mass scale anytime soon, analysts warn.

The marketplace is sending a big signal to carmakers. It's just that developing new products takes time. And it takes money that is suddenly in shorter supply as sales fall.

"Everything has shifted faster than probably everyone predicted," says Karl Brauer, editor in chief at Edmunds.com. "Ford had a definite turnaround plan. I think that is starting to get heavily compromised by what's going on."

Honda, by contrast, appears to be bearing up the best in the current climate. One reason: Its lineup is not heavy on trucks, which have been a drag on profits not just for the US Big Three but also for Toyota.

"Hybrids will keep getting more popular," predicts John Wolkonowicz, an auto analyst at Global Insight in Lexington, Mass.

But even as carmakers roll out new models and put pickup trucks on sale, it's not necessarily an easy time for consumers. Some sticker prices are actually going up, as automakers adjust to higher costs for things like steel. And the new hybrid technologies come at a cost.

"You're not going to save any money on any of this," Mr. Wolkonowicz says. "This whole situation is simply going to cost consumers money."

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