Dragon you're right about the current "mini-cars". I'm talking about the new ones they've been parading around the auto show circuit. They are supposed to be the perfect cars for congested city traffic/parking.
Remember, this law won't even go into effect until like 2015 or later, so while those auto show cars aren't production ready yet, they will be if need be.
I think GM's displacement on demand will help the most though. Getting the poorer performers to improve their mpg ratings help more than designing entirely new (meaning costly) vehicles.