To Go Big or To Go Green?

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VW introduced its new SUV on Sunday at the Detroit Motor Show.

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GM revealed its Chevrolet Bolt in Detroit - a compact electrical car that can go 200 miles on a single charge.


You can see optimism once again in Detroit as the 2015 Detroit Auto Show pulls into swing. The U.S. car industry is beginning to boom again as sales of the “Detroit big three” – Ford, GM, and Chrysler – have rebounded.

"There is an exuberance back in the industry - happy days are here again," says industry analyst Michelle Krebs, director of automotive relations at the AutoTrader Group.

But it is not time for motor company’s to get over confident, yet. A question still remains, Will car buyers go big or will they go green?  Sometimes stereotypes hold true and when it comes to Americans, the belief that going bigger is better often holds true when it comes to cars.

"Looking at history, you see that when gas prices have gone up historically that's really hurt the car industry, particularly the American car industry," says University of Michigan professor Don Grimes. "But, when the economy is low and gas prices are high, they are reluctantly convinced into buying energy-efficient small cars and hybrids."

As the Detroit Motor Show kicked off this week, you could see motor companies trying to satisfy both audiences.  Mercedes unveiled its latest C-350 plug-in hybrid, as well as the 2015 GLE Coupe - one of a slew of so-called "CUVs" (crossover utility vehicles), which are built on a car platform but combine elements of SUVs.

"They're responding to political and advertising needs to say that they're going towards fuel-efficient vehicles," explains Professor Grimes.

And even if Detroit is yet again feeling good and confident about the future, the US government is keen to ensure that cockiness will not be able to lead the industry to the brink of destruction again.

"In the US, automakers have to meet new, more stringent fuel economy standards in 2016 and then even more stringent ones in 2025," points out AutoTrader Group’s Michelle Krebs.

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