July will go down as a milestone for Toyota as the first month they beat Ford to gain No. 2 position in the American market. The biggest reason behind this is that buyers are flocking to smaller, more fuel efficient cars. GM and Ford made a bet on SUVs and large trucks that worked very well for them over the last decade. Now that the price of fuel is over $3/gallon in many states buyers are going for standard cars over SUVs.

This comes only a few months after Toyota beat out DaimlerChrysler to gain the position of the third largest carmaker in America. It’s highly unlikely that the price of fuel will drop significantly below where it already is, so Ford and GM really need to get moving on a small car strategy to drive them in to the next decade and further.