Soaring demand for compact and fuel-efficient vehicles in the U.S. has seen sales of the diminutive Smart ForTwo outstrip expectations, causing its distributor, Penske Automotive Group, to increase forecasts for 2008 sales. Original estimates for the ForTwo were pegged at just 20,000 units for the year when the car went on sale back in January. However, Penske has now revised that figure to between 24,000 and 27,500.

Penske said surging gasoline prices had helped boost demand for the small, fuel-efficient car, reports the Associated Press. Currently, the only factor limiting the sales is supply. According to Penske, if Daimler could deliver more vehicles to the U.S. sales could reach between 30,000 and 32,000 units as early as next year.

Before its launch there were doubts that a car measuring in at just 8.8 feet in length and a little over 5 five in width and height would be able to sell in a market dominated by heavy SUVs and pickups, but the sales have shown that rising fuel prices have dramatically changed the face of the American market.