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Published on Thursday, July 17, 2008
By Nick Bunkley
Consumers used to buy small cars for a simple reason: They were cheap.
A decade ago, many budget-minded shoppers even turned down such options as air conditioning, power windows and compact-disc players to keep the price low.
Now people of all income levels are buying small cars to pinch pennies at the gas pump, but they are not scrimping on creature comforts. Instead, they are spending hundreds or even thousands of dollars on options, such as heated leather seats and high-end entertainment systems, usually found in luxury cars.
That is adding up to some rare good news for Detroit automakers, which have long had trouble earning a profit on small cars. By contrast, they make as much as $10,000 on each big pickup or sport utility vehicle they sell. But consumer tastes have shifted rapidly as the price of gas has climbed above $4 a gallon
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