Re: fuel-efficient cars

if a noun is preceded by adjectives, then any pronoun referring to that noun MUST refer to the complete package of adjectives + noun.
so, in choice (d), "their" must refer to "fuel-efficient small cars"; that doesn't make sense, since fuel-efficient small cars have not been made throughout the entire production history in question.

Why is that their in D can't refer back to Manufacturers?

still doesn't make sense; we're talking about the "production history" of the cars, not the manufacturers.

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