Small Is the New Big

Ever-increasing gas prices, environmental concerns and demand in developing countries are leading worldwide small-car sales past those of larger counterparts, Newsweek reports. With cars like India’s Tata Nano set to overhaul the auto industry by offering new mobility to millions, US automakers are scrambling to retool their businesses to sells more small cars for smaller per-auto profits.

The $2,500 Nano is truly an emerging-market car, however, and the Detroit will still see higher margins in the US because Americans expect their subcompacts to come loaded with perks. With GM, Chrysler and Ford heavily invested in compacts, they actually fear lower gas prices: “That would take the pressure off,” said Ford’s chairman. "We've all started down this path now." (More small cars stories.)