Hybrid Car Review

A 'seismic shift' has occurred in the vehicle marketplace according to some Ford executives. While the overall market fell 12% in March, it wasn't all bad news. Hybrid car sales increased by 10%.

Total U.S. light-vehicle sales in March dropped by 12.0 percent; sales for the first quarter fell 8.0 percent. But sales of small cars — from the Honda Fit to the Ford Focus — rose 3.6 percent during the first quarter, according to Ford Motor Co. The segment's share jumped by 2.1 percentage points to 17.8 percent of the total industry.

The downsizing trend can be seen elsewhere, too. Crossover sales are now almost double those of truck-based SUVs, Ford says. And sales of four-cylinder engines are spiking: Nearly 40 percent of vehicles purchased in March contained four cylinders, overtaking six cylinders and showing the highest monthly share since at least 2002, according to J.D. Power and Associates.

The end story: The Big Three are having to shift their priorities. From this point going forward, they're going to be pushing hard to develop smaller, more fuel efficient cars.

Ford recently conducted an experiment and in a computer simulation removed the steel from a Ford Focus, replacing it with aluminum. That dropped the weight by 1/3. At that point, a smaller engine was installed, and the car was capable of getting 50 mpg while still getting the same distance. But that's not really a practical choice.

The cost of an all-aluminum car could top $50,000—not a sum the typical economy-car buyer is willing to pay. "What's going to be the cost acceptance for this much improvement in fuel economy?" asks Dan Kapp, director of Ford's advanced engines and transmissions. "We don't know yet."