Why they didn't? Simple, because no American wanted to buy such a fuel efficient car. You guys wanted it big, bigger, biggest and that's what you got.
*shrug*
Don't blame the industry or government when you asked for the wrong thing for too long.
umm I am not American (nor a guy).
But i want to clear out something. American Government always encouraged people to save less and Invest more, because it has some basic lack of understanding of economics.
Even now, during the recession, government want people to spend and take loans so that banks may start working.
http://mises.org/Community/blogs/mor...ic-crisis.aspx
Government thinks by doing so, economy will start booming again. It doesn't happens.
Also, American people do not want big Cars that is why GM is failing. GM never learnt from Toyota and Hundaye and others which are a success US, infact, it was a matter of pride for GM Chrysllers and Ford to create luxurious big and RICH cars. They did not wanted to do same business as toyota were doing. They wanted to maintain their unique position.
And they will do it again. They won't learn.
They do not believe in consumers power. They believe in Keynesian Economics, the supply-side economics which is wrong and irrational.
They thinks, people will buy that which they will make.
\And they want people to reject toyota no matters how better cars they make, and accept the luxurious cars of GM, Ford etc.
People don't accept it now a days, hence they are failing.