In reply to mad_machine:
I don't see them having a problem with small cars, but more an issue of how to make money selling them. The days of duming cars into a market to either just boost sales numbers or make CAFE numbers so that you can sell profitable cars that have bad mileage is over. They have to make money. You can say the same thing for Fiat- since they have just a small car here, and are struggling to make any money. The US is a unique market, since it's hard to get a premium for small cars- they are more viewed as cheap than premium.
At Chryslers volumes, it's really hard to pay the investments and the running costs of the plant- so they need to currently solidify their profitable cars, and then move to different markets.
For your Neon example, that is a natural realization that most passengers are in the front seats, particularly in small cars. Again, they were trying to keep the costs down.
Once Chrysler/Fiat can expand the market to wherever, they can make smaller cars. It's a tough segment to be in and make money.
