Overview

About 30 years ago, when Americans drove big cars and were the envy of citizens in other countries, Volkswagen ran an ad campaign in the United States with the theme "small is beautiful." At the time, it seemed as though the German automobile manufacturer was out of touch with reality. The VW Bug, while enormously successful in Europe, looked a little silly on the American landscape, like a midget in a land of giants. Still, Volkswagen kept driving home the message that small cars were here to stay.

Then the unforeseen occurred: Middle Eastern oil ministers showed the world that, yes, indeed, they could agree on something namely, a much higher price on a barrel of oil. By stubbornly withholding enormous quantities of crude, they tilted the supply-and-demand equation in favor of the suppliers. The price of gasoline rose well over one dollar a gallon. Gas lines appeared everywhere as the oil ministers held a knife to the world's jugular vein.

Americans, long known for their love affair with big cars, began to discover that small truly was beautiful. They demanded smaller cars from the auto manufacturers to salve their aching wallets, and Volkswagen was there to oblige. What was once a "funny little car" became a chic necessity.

Over time, people found that small cars enjoyed certain advantages over their larger counterparts. Besides relishing the increased gas mileage, they liked the way small cars handled more like a British sports car than an ocean liner on wheels. Squeezing them...