Automakers bank on 'compacts'

DETROIT (AP):

United States automakers are gearing up to make more compact cars this year. It's another bet on a part of the car market that has thrived this year as consumers fret about the economy but still want a new set of wheels.

General Motors is adding Saturday shifts in the fourth quarter at an Ohio factory that makes the compact Cruze, two people briefed on the matter said last Monday. Ford, Toyota and Hyundai also have scheduled overtime at compact-car plants.

That might seem chancy with consumer confidence at a two-year low. But the car makers are expecting sales of compacts to increase as nervous consumers go for lower sticker prices and better gas mileage to save money. Compacts sell for US$16,000 and up, and can get around 40mpg in highway driving.

Recovering from shortages

Also, car companies are trying to steal sales from Honda and Toyota, whose factories are just now recovering from parts shortages due to the March earthquake in Japan.

The strategy might pay off. As anxious as consumers say they are about the future, a survey released Tuesday by the Conference Board showed that, compared with July, more of them plan to buy a car within six months.