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Five Key Automotive Trends in 2006

Smaller cars and more hybrids are emerging trends among carmakers, both foreign and domestic, including the introduction this year in North America of the Toyota Yaris, pictured below.

Published: 08-Jan-2006

1. High-tech cars: The convergence of technology and the automobile is happening at lightning speed. Navigation and DVD systems have become commonplace. Customers will see a quantum leap in advanced technology that will make cars safer, more enjoyable to drive and more comfortable. Safety systems that can sense crashes and react milliseconds before impact and seat belts that inflate into personal air bags are coming. In-car entertainment systems aimed at the Xbox and iPod generation will make car stereos look antiquated. Adjustable foot pedals will become more common. On-board computers that know their driver's favorite radio stations, preferred seating position and air conditioning preferences are no longer just the stuff of sci-fi films.

2. Small cars: Small will be big in 2006.The battle will play out in the subcompact car market, where automakers are placing more design, styling and engineering resources. U.S. automakers mostly shunned the small car segment in the 1990s in favor of profitable big trucks and SUVs. Even today, automakers sell just 10 subcompact models in the United States, though sales are up 12 percent this year. But the field gets more heated and crowded this year with new entries from Nissan, Honda and Toyota. And Ford plans to get back in the segment, too. Profits are slim, at best, but subcompacts such as the Chevy Aveo, Scion xB and Kia Rio represent an opportunity to attract thrifty shoppers concerned about fuel economy and first-time buyers, and to keep a customer for life. Small can be fun, too -- just look at the Mini Cooper.

3. Hybrids: Gasoline prices have now been elevated for more than a year -- long enough to affect consumer behavior. Fuel economy hasn't been a concern of car shoppers since the early 1990s, but it is top of mind now. And buyers will soon have an incredible choice of thrifty gasoline-electric hybrids to choose from as the hybrid goes mainstream. Look for hybrid versions of the Chevy Tahoe, Saturn Vue, Toyota Camry, Nissan Altima, Kia Rio, Chevy Malibu and Hyundai Accent in the next 18 to 24 months. And consumers can expect prices to come down, too, making them more of a value proposition.

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