There can never be a “market driven” buyer, since there are so many regulations that dictate what the car companies manufacture. The market doesn’t rule – look at what happened to the electric car in California–there was a market but the industry not only removed the product, they destroyed it.
There is not a free market. The industries of auto and oil are intermixed to the degree that there will not be a general trend to increase MPG, regardless of the facts that it is do-able. Alas, the stick is likely the only way to motivate, that or a general uprising of the buying public, which I don’t see happening anytime soon.