Nine out of 10 new car shoppers expect gas prices to rise sharply over the next month, and two-thirds of them say that’s influencing their thoughts on what to buy, according to a new survey.

Kelley Blue Book’s Market Intelligence Study found that consumers’ expectations of higher gas prices are creeping higher, with 87 percent anticipating sharp rises in a May survey, up from 66 percent in April.

The findings suggest that the U.S. auto market’s recent shift toward cars and away from trucks will accelerate this summer.

In May, cars accounted for 52.7 percent of new light vehicle sales, according to Autodata Corp., up from 51.9 percent in March.

The shift to smaller vehicles is likely to be further encouraged by a government “cash-for-clunkers” program offering customers cash vouchers of up to $4,500 to trade in old vehicles. Customers buying substantially more fuel-efficient models would benefit the most under the bill being hammered out in Congress.

But analysts say it’s unclear whether these shifts in customer behavior are permanent.

Last summer, the share of car sales increased to as much as 57 percent of the total when gas prices surged, but the market went right back to a roughly 50-50 car-truck mix when fuel costs subsided, said Rebecca Lindland of IHS Global Insight. “We did not see any long-term change.”

That is only likely to happen “if gas prices stay above a certain level — maybe $3 a gallon for months on end,” she said.

Alternatively, the government could change consumers’ behavior by increasing fuel taxes, as governments have done in Europe and other parts of the world, Lindland said. “But I’m not advocating those.”

U.S. gas prices typically rise in the summer, when people drive more. They now average $2.64 a gallon, up from $2.53 a week ago, and $4.06 a year ago, according to the roadside assistance organization AAA.

In Michigan, gas prices average $2.87, compared with $1.98 a gallon in March.

“With gas prices rising, combined with what happened a year ago in May, the consumer is skittish,” said Tom Libby, president of the Society of Automotive Analysts.

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NASHVILLE — Nissan Motor Co. will immediately move some vehicle production from Japan to Mexico to cushion the blow of a strong yen, the company says.

The vehicles — most likely the small Tiida — would be made in Mexico and exported to markets around the world, according to Nissan North America, which oversees Mexican operations.

The Tiida is currently manufactured in both Mexico and Japan, where the steep appreciation of the yen has deflated this year’s earnings for both Nissan and Toyota Motor Corp.

Nissan CEO Carlos Ghosn announced on Feb. 9 that the company will report losses of about $2.9 billion for the fiscal year ending March 31, 2009. He vowed to undertake global cost-cutting moves that included the elimination of 20,000 personnel. About 12,000 of them are occurring in Japan.

The yen’s trading value is a major concern to the Japanese industry.

Jogi Tagawa, Nissan’s corporate vice president and global treasurer, told analysts this month that every one-yen change in the yen-dollar exchange rate has an $85.7 million impact on Nissan’s operating profit. In the past six months, the dollar has dropped by 15 yen — an operating profit blow of nearly $1.3 billion, according to Tagawa’s formula.

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Ford Motor Co. CEO Alan Mulally jumped into the passenger seat of the tiny Ka city car his company had just unveiled at the Paris Auto Show.

“The future of the auto industry is on display at the Paris Auto Show, and the future is now,” he said, gesturing to nearby vehicles so enthusiastically that he threatened to knock a window out of the little two-door Ka.

“The requirements of customers around the world are coalescing,” Mulally said. “They want quality and fuel efficiency with no compromise on comfort and performance.

“That’s the world we live in.”

Mulally speaks for an entire industry that believes Americans are ready to buy more small cars — and pay more for them — than ever before.

For decades, American and European automotive tastes have diverged. Americans reveled in cheap gas prices and big vehicles with big engines. Europeans, who have lived with $4-a-gallon gas for years — at times paying twice that much — built stylish, fuel-efficient little cars that offered more comfort and features than those the Detroit Three derided as econoboxes.
Striking a balance

But even in the face of rising gas prices and fuel-economy requirements, some analysts question how big Americans’ taste for small cars will be. Simply put: Demand may not grow as much as the automakers expect.

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Ford Motor Co.’s plan to morph itself from a truck to a car company in North America is backed by market research showing that a new line of global small cars will be well received in the U.S. when they go on sale in 2010, company executives said.

But getting from now until then will take more cash incentives in a shrinking U.S. market with fearful consumers and tight credit, the automaker’s top marketing executive told reporters Monday night.

Ford, trying to allay concerns about how it will be profitable as its primary market shuns high-dollar trucks and sport utility vehicles, put three top executives before reporters inside the factory just north of downtown Detroit that made the first Model T almost a century ago.

Added cash incentives could be good news for consumers. Many of them need the money to increase down payments to qualify for financing, said Jim Farley, vice president of marketing.

Ford’s revamped revival plan will bring the 105-year-old automaker closer to its Model T roots, focusing more on fuel-efficient cars and crossovers and less on the big pickups and SUVs that have made up the bulk of Ford’s sales in recent decades.

The “core DNA” of this new plan is the new Ford Fiesta subcompact car, which Ford is launching around the world through 2010, when it comes to North America, said Jim Farley, Ford’s group vice president for global marketing and communications.
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After years of dithering, Toyota has finally decided to enter the Indian small-car market.

Its car, codenamed 800L, is critical to increasing volumes and market share in India.
The car is being designed and developed in Japan with the BRIC economies —- Brazil, Russia, India and China —- in mind.But it would be first launched in India.

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TOKYO (Reuters) – Nissan Motor Co , Japan’s third-biggest automaker, is set to supply Chrysler LLC with fuel-efficient small cars, Japanese broadcaster NHK reported on Thursday.The two companies are in the final stages of negotiations on a deal for Nissan to supply Chrysler with a model with an engine displacement of around 1.8 liters, it said on its website.Nissan and Chrysler, which was acquired this year by Cerberus Capital Management LP , are in talks to supply cars, trucks and engines to each other, a source said last month.Nissan spokeswoman said negotiations with Chrysler are still ongoing and nothing has been decided.Both Nissan and Chrysler have similar original equipment manufacturing (OEM) deals with other carmakers aimed at saving development costs in an increasingly competitive industry.Over a year ago, Nissan and its French partner Renault SA broke off talks with General Motors Corp over a comprehensive three-way alliance.While Nissan-Renault Chief Executive Carlos Ghosn has said the alliance could still seek a U.S. partner in future, the discussions with Chrysler are on a smaller, product-by-product level, the source said.