The wages of the people working on the assembly line wouldn't shrink either, just because the car is lighter. And that's got to be one of the biggest costs in manufacturing. The cost of fuel would have to really go through the roof to justify special materials. However, you may have noticed that the fuel economy of the subcompact car (~30 mpg) wasn't hugely better than that of a midsize sedan (~23 mpg). Most likely it is the lack of styling that has resulted in a lower purchase price, but it didn't lower the fuel cost much. At current prices, fuel might cost $1500/yr. for a commuter car, say. Over the ten years that the Kia Rio is warrentied, the fuel costs 50 percent more than the car, for an end-of-life cost 2.5-times the purchase price (not including insurance, licensing, and non-warrantied repairs & maintenance). Whereas a mid-size sedan might only be warrantied for maybe 5 years, the cost of fuel would be the same, but as a percentage of the total only adds 50 percent to the end-of-life cost of the car. If the owner managed to make it last 10 years, then the costs between mid-size and subcompact cars would be eminantly comparable. But it's easier to see if you look at purchase financing....

If people choose purchase financing of a mid-size sedan, the cost of fuel would be large compared to their monthly car payments. For example, if they pay $300/mth on purchase financing for their car, the fuel might cost them an additional $150/mth. Fluctuations in fuel prices get noticed immediately.

Interestingly, the large number of people who finance their cars might lead to a faster transition to more fuel efficient vehicles, i.e. smaller, lighter, maybe even single-seat cars. There is greater sensitivity in the short term. Big car companies might want to think about that. The market might shift faster than they can re-tool.