The US consumer does not buy small new cars.

As has been pointed out, they sure did in the 70's when there was a huge financial incentive.

I expect that acting like all American's want are $60K+ luxury cars is what is going to take the US auto industry into the next massive downward spiral.

I agree with you. I.m.o. consumer preference is the root cause of the issue.

The 2008 bailout had some strings attached to modernize. I believe the Chevrolet Spark was one of these strings: https://en.wikipedia.org/wiki/Chevrolet_Spark#Third_generati.... It was eventually discontinued.