Which they aren't.
Despite the current meme that Americans are dumping SUVs for cars (only partly true), there is not a groundswell of demand for very small cars. Americans don't want small, fuel efficient cars, they really want cheap gas. Absent cheap gas, they want large cars and mid-size SUVs to replace their large SUVs.
There are some small cars which do well because they fill a specific niche. The Mini, for example, or the upcoming Smart. Others, like the Yaris (son of the abominable Echo) only really appeal to people who can't afford something better, or rental car fleets. Smart, by the way, has not been profitable since its inception in its home market.
On the regulatory side, the new CAFE calculations, which use a vehicle's footprint to calculate fuel economy targets rather than an arbitrary number, should give manufacturers the flexibility to avoid b-cars and concentrate on improving the efficiency of their larger vehicles.
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