Unintended consequenuences always happen
Smaller cars does not necessarily mean that they will be made less well. Also, there are unintended consequences in economics for every way that you look at it. For every change that is ever made there will be consequences that end up screwing over some people. It's annoying, but it's true. Also the government isn't the one mandating smaller cars, the article mentions how people are shifting to smaller cars themselves. The shift to smaller cars is being caused by consumers, the market at work.