The eleven vehicles most obviously classified as subcompacts accounted for 3.8% of the American automobile industry’s May 2013 sales volume, down from 3.9% a year ago. Overall volume increased, but not at the rate of the overall market, and certainly not at the rate achieved by their opposite, pickup trucks. Let’s have a little look at the small cars.
Through the first five months of 2013, subcompacts are responsible for four out of every 100 new vehicle sales. That’s down from the 4.3% achieved by the same eleven vehicles in the same period of 2012.
Although it could be intelligently argued that the Hyundai Veloster (down 22% to 2826 in May) and Volkswagen Beetle (up 24% to 3718) could be listed here, as well as city cars like the Chevrolet Spark (2581 May sales), Smart Fortwo (up 16% to 818), and Scion iQ (down 41% to 526), the slightly narrower borderlines we’ve established for subcompacts in this post should do a better job of manifesting conventional subcompact purchases and leases. The Fiat 500, Mini Cooper, Toyota Prius C, and leftover Chevrolet Aveos are the most unconventional cars capable of throwing a wrench into the normality of the proceedings.
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Auto
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May 2013
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May 2012
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May % Change
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5 mos. 2013
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5 mos. 2012
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YTD % Change
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Chevrolet Aveo
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1 | 5 | – 80.0% | 2 | 53 | – 96.2% |
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Chevrolet Sonic
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9523 | 7205 | + 32.2% | 37,783 | 35,455 | + 6.6% |
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Fiat 500
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4051 | 4003 | + 1.2% | 17,562 | 16,702 | + 5.1% |
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Ford Fiesta
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6693 | 6080 | + 10.1% | 28,801 | 26,737 | + 7.7% |
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Honda Fit
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4667 | 3879 | + 20.3% | 20,486 | 19,706 | + 4.0% |
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Hyundai Accent
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5578 | 6166 | – 9.5% | 24,222 | 30,810 | – 21.4% |
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Kia Rio
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5142 | 4019 | + 27.9% | 19,491 | 18,728 | + 4.1% |
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Mazda 2
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791 | 901 | – 12.2% | 4851 | 9213 | – 47.3% |
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Mini Cooper *
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4033 | 4377 | – 7.9% | 16,907 | 18,623 | – 9.2% |
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Nissan Versa
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8614 | 8643 | – 0.3% | 55,056 | 52,173 | + 5.5% |
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Toyota Prius C
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3782 | 3693 | + 2.4% | 17,133 | 12,594 | + 36.0% |
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Toyota Yaris
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1778 | 3521 | – 49.5% | 11,179 | 17,964 | – 37.8% |
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—
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—
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— | — | — | — | — |
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Total
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54,653
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52,492 | + 4.1% | 253,473 | 258,758 | – 2.0% |
On that note, consider the falling sales in BMW’s Mini showrooms. Sales here include the original Cooper Hardtop as well as the Clubman, Convertible, Coupe, and Roadster. More than two-thirds of Mini’s non-Countryman/non-Paceman total is made up by the one car which spawned Mini’s return. Only 5527 of the Coopers sold this year have been Clubmans, Convertibles, Coupes, and Roadsters. Of these five Cooper sub-models, only the Roadster has posted year-over-year gains in 2013. By itself, the “regular” Mini Cooper’s 2521 May sales equal a 5.9% drop from May 2012’s output.
The Fiat 500, on the other hand, has yet to post a year-over-year U.S. sales decline in 15 tries, although growth has predictably slowed.
Back to the subject of conventional subcompacts, the Chevrolet Sonic’s May victory stands in contrast to the Nissan Versa’s usual leadership. Indeed, the Versa is 17,273 sales ahead of the Sonic through five months after a 30K+ unit victory in 2012. The Versa is not all-conquering. Don’t fall into the trap of confusing sales leadership with outright market domination. 78% of America’s 253,473 subcompact customers haven’t registered a new Versa this year. Jointly, the Hyundai Accent and Kia Rio own 17% of the category.
The very suggestion that the buyer of a well-optioned JCW Mini Cooper S would otherwise consider a Nissan Versa is comical, but we’re always left with these sorts of issues when rehashing sales data. (BMW releases 3-Series sales figures as a group, which presents us with the opportunity to compare a measure of hidden M3 volume, whether we like it or not, with sales of the Lexus IS250.) Besides, it is interesting to note that, despite the price differentials, buyers turn to the Mini and Honda Fit in similar numbers, although Chevrolet did sell twice as many Sonics as BMW sold Minis in May. Granted, unlike the potential Fit buyer, a prospective Mini customer isn’t also eyeing the Civic on the other side of the showroom.
Regardless of the validity of comparisons, the numbers achieved by a large group of small cars certainly proves that interest in inexpensive small cars continues to pale in comparison with moderately more expensive compacts and midsize cars. Together, the Toyota Camry and Honda Accord have found 326,939 buyers in the United States this year, outselling these subcompacts by 73,466 units. The Toyota Corolla and Honda Civic have outsold these subcompacts by 8022 units.
Sure, what with plunging Mazda 2 volume and disappearing Toyota Yaris sales and challenging times for the Hyundai Accent, subcompact sales haven’t been healthy this year. But those same two pairs were handily outselling these subcompacts at this time last year, too.
What’s the point? If subcompacts aren’t as profitable and don’t sell as often, why bother? Automakers feel that they’re hedging their bets against a possible turning of the tide, like when fast-rising fuel prices led to the Honda Civic becoming America’s overall best-selling vehicle in May 2008, outselling even Ford’s F-Series. More important, automakers sell subcompacts as a means of targeting first-time buyers, hoping that a future increase in wealth will inspire a Sonic owner to become a Cruze owner, who will then step into a Malibu before ending up in a CTS, or more likely, a Silverado.
Independent analyst Timothy Cain is the founder and editor of GoodCarBadCar.net. His look at the important segments will be a permanent fixture at TTAC, along with a look at the market up North.
“The very suggestion that the buyer of a well-optioned JCW Mini Cooper S would otherwise consider a Nissan Versa is comical”
This is especially true when I configure a JCW and the price tag is over $40,000.
It’s time to stop talking about the economy in the sense that it is recovering. It has recovered, and it has been that way for well over a year. The recession ended in the summer of 2009. Recovery began then and ended when the levels reached the pre-bubble levels of gain – which was probably sometime in 2010. Recovering to pre-bubble bursting is not recovering, that is rebubbling.
Truck sales are a great sign, especially since gas prices are still considered high, that people aren’t saving for dark times anymore – and have not learned lessons from the past.
I definitely don’t see how you think we have recovered, money is being printed like there is no tomorrow, people are buying more pickups because there current vehicles have held out long enough or otherwise.
The fact people are buying more pickups just means they don’t have time to diddle with all the flaws of cafe cars.
Honestly it makes more sense then ever to buy a pickup as the family vehicle or even a DD.
If we had truly recovered gas wouldn’t be above $3 a gallon and food costs wouldn’t be skyrocketing as they are.
There must be a nearby community college where someone could take an economics class and learn that as an economy grows, demand increases for goods, inflating their prices.
One could also learn about the taxation processes, costs of business, a hyper inflated dollar, and so much more….. If only……
BTW, do you know when the last refinery was opened in the US? And why such is?
I don’t work in the energy field, and I don’t track refinery openings. I suspect that it’s been a long time because the Saudis and other oil producers have developed their own refineries close to the source of production, to create jobs there and capture more of the value chain. Just smart business to refine at the source of production rather than transport raw materials.
I did read that US oil production has increased by 42% over the last 5 years, and that domestic production is now equal to oil imports. I think there is reasonable hope that if we are a bit more careful in our use of oil that US and Canada sourced oil could be sufficient for our needs 5 years from now.
As far as your note on taxation processes, not sure the intent, but taxes have never been lower in the last 70 years as they were last year. You can look that up.
Don’t know what you meant by “costs of business”, but if you think they are lower elsewhere, please educate us on where that might be.
Hyperinflated dollar? If that were true, it would mean continued low prices due to cheap imports. Basic economic literacy.
Either I’m backwards or w/e else but having more money than gold to back it up doesn’t help in any way or shape for the cost of anything. While your personal taxes may be lower than ever, getting taxed at every corner and having the EPA up your behind, doesn’t help domestic oil production at all. And oil is in many cases refined close to its market, as it helps ensure proper specifications are met, and for the way raw form is over time. In addition it’s easier to ship the base, then the many products.
We have more demand now with less refineries than we had 3+ decades ago.
There must, must, must be a conspiracy here that prevents more refineries from getting built. There must be someone blinding oil companies and refiners from seeing the huge potential returns that could get by investing in a new refinery. It must be the EPA. If they will just listen to me, the scales will fall from their eyes.
Or, companies have increased the productivity of existing plants, while also expanding their capacity. This makes a lot of sense given that just about every industry has increased its manufacturing productivity by a few percent per year; and that adding to an existing facility is often the easiest if the location of the original facility was well chosen or if service businesses have developed in the vicinity to keep it operating.
Loosen the tinfoil hat a little.
Joel, your a very close minded person I see.
But don’t worry I won’t try to argue the earth is round, just me and my “tinfoil hat”
Honestly, do you understand how refining works? You can’t just take a few severely outdated refineries and double capacity, the process isn’t very workable, the refineries have been working overload for a long time, and its only inevitable that they will break down over time as seen from the 3 recent shutdowns in the north east.
According to the EIA, there were 300 refineries in the US 35 years ago and about 180 today. Yet those 180 have more refining capacity than the previous 300. So the plants were expanded, their productivity increased, both, or new larger plants displaced old ones.
And, current utilization rate in the US for refineries is under 85%. They refine about 17.5 million barrels per day, vs. consumption domestically of 18.7 million barrels per day. So existing plants have more than enough capacity to domestically refine all the US uses.
The information is from the EIA. I guess they could be putting up wrong numbers in their detailed reports.
Environmental laws are the reason. The fact is that almost any petroleum refinery is essentially a sacrifice area, and the prospects for any meaningful remediation are a joke.
BUT, it is a totally bogus problem because all you do is build up your new refining capacity on an existing site, one which you totally soaked in petroleum 50 years ago.
Like my dad used to say, “It doesn’t smell bad, son. It smells like money”.
It’s difficult to point to gas and food as signs of the economic strength/weakness since both can be and are so easily manipulated by sources other than supply and demand.
Look at when the price of gas in the US went from nearly $5 to $1.50 in something like 6 months. Some of that was demand, but the vast majority was outside manipulation – people didn’t stop driving enough to make the price drop by 75% in that short a period of time.
It does make sense on an individual basis to buy a truck (or it probably made more sense a year or two ago when they were slightly cheaper with incestives) since they will likely hold their value, at least for a while. On the economy as whole though, it is a long range bad decision.
But yes, it’s time to dial back the cash output. The economy will almost always fix itself in enough time, but panicking as soon as something bad happens and trying to fix it puts us into the wild swings we’re presently going through. This is especially true of when the bad thing is a necessary correction.
Agreed, the economy heals slower with manipulation.
By all accounts the 1920 recession was much worse then the Great Depression, however, no govt intervention was involved in 1920 and the economy healed rapidly.
Hummer,
30 seconds of googling reveals the unemployment rate in 1920 was 5.2%, but in 1932 was 23.6% — how does that square with your statement that “by all accounts the 1920 recession was much worse then [SIC] the Great Depression.”
Unemployment didn’t go down as far because it recovered fast enough, that it had little affect on unemployment.
But unemployment Is only a sign of a bad economy it’s not involved in the downfall related to collapse, it trails the economic state, but its not as if it is an involved factor.
But assuming you weren’t taught under the common core(anti-American) doctrine, then this is something that you can read directly out of a middle school textbook.
my dear hummer,
(Sigh) Just a word or two of advice. Like a great man once said:
“A little learning is a dangerous thing;
Drink deep, or taste not the Pierian spring:
There shallow draughts intoxicate the brain,
And drinking largely sobers us again.”
James Grant on the short but severe post-WWI Depression of 1920-21:
“Our Great Recession ended 2½ years ago, according to the official cyclical timekeepers, but you wouldn’t know it by a glance at the news. Zero percent interest rates and $1 trillion in “stimulus” notwithstanding, the U.S. economy can hardly seem to heave itself out of bed in the morning. Now compare this with the first full year of recovery from the ugly depression of 1920-21. In 1922, under the unsung stewardship of the president best remembered for his underlings’ scandals and his own early death in office, the unemployment rate fell from 15.6 percent to 9 percent (on its way to 3.2 percent in 1923), while constant-dollar output leapt by 16 percent. After which the 1920s proverbially roared.
And how did the administration of Warren G. Harding, in conjunction with the Federal Reserve, produce these astonishing results? Why, by raising interest rates, reducing the public debt and balancing the federal budget. Let 21st-century economists rub their eyes in disbelief. Eighteen months after the depression started, it ended.”
OMG. Now someone in this thread is citing a right-wing, no-name hack journalist as if he were a real economist.
See you guys later. Whenever I need a dose of right-wing drivel, I will tune into Rush. At least he delivers it with style and humor.
Pure ad hominem is not a convincing rebuttal.
I seem to remember gnashing of teeth and tearing of clothes during the Bush Presidency when budget deficits were 1%-2% of GDP. The US budgetary deficit was approximately 7% in 2012, and best case for 2013 is over 3%. Unemployment is still 7.5%, which puts upward pressure on deficits. The labor force is shrinking, which will put long term downward pressure on GDP growth.
You perceive this situation as a recovery b/c someone told you that full employment and narrowing budget deficits would indicate re-bubbling of the economy?
Screw it. My weekend starts today, and I’m drinking at the stroke of noon.
Even in the best of times people will complain about the economy. There was no sense of unlimited wealth during the 2007 bubble, yet everyone looks to that as when everything was great. The poor were still poor, people were still unemployed.
Unemployment is artificially high right now in the sense that during the down turn businesses realized they could function with fewer people working if they just worked them harder. Nothing motivates like the fear of losing your job during a recession. There is still that mindset and until the demand for their services or goods outpaces their workers ability to keep up it’s not going to change – but it will change in the not too distant future.
US labor productivity has been stuck around 1.5% annually
since 1970. An era dominated by two macroeconomic policy
shifts. First, a prolonged reduction in US oil output, caused
partly by federal regulators. Second, a 50% reduction in
military spending per capita. Obviously, the latter will never
be addressed with this administration, but, if we are lucky, the
current oil boom will last deep into the next decade.
Economists estimate we need 2% labor productivity growth per
annum to cover our spending habits. Better hope for some gushers
and a few new undiscovered reserves.
We don’t have a 50% reduction in military spending per capita since 1970 — here are inflation adjusted numbers:
::http://en.wikipedia.org/wiki/File:PerCapitaInflationAdjustedDefenseSpending.PNG::
The spikes are Vietnam, Reagan-Cold War, and Bush II-started wars.
Furthermore, there is a lot of military waste because there are many long-term projects that should be cancelled, but aren’t because they benefit some Congressperson’s district. Both parties are guilty of that nonsense.
Also, labor productivity doesn’t appear to have changed very much since the 1970s:
::http://www.epi.org/publication/ib330-productivity-vs-compensation/::
I meant % GDP. The metric is important b/c GDP is correlated with the size of the labor force.
The only nonsense in defense is the degree to which we have progressively de-funded the military as a percentage of GDP. If you look at military and entitlement spending both as a proportion of the budget and as percentage of GDP, we’ve simply been firing our military personnel, thus, reducing the number of people with access to higher education, healthcare, etc, and we’ve converted them into entitlement dwellers. Wealth disparity has increased rapidly.
Biggest policy blunder of the 20th century, and it happened b/c politicians and citizens couldn’t imagine a purpose for the military during peacetime. The problem persists to this day.
For percentage of GDP, it’s down from 1970, but not down from 1950:
::http://www.usgovernmentspending.com/defense_spending::
For active duty personnel? That’s been cut in half since 1970, but it’s roughly the same number as in 1950. You’re comparing a time when we had a draft to a time where we definitely don’t.
::http://www.infoplease.com/ipa/A0004598.html::
Military pay is now higher than civilian pay for equivalent jobs from the last source I read. This is partly because if DoD asks for a 3% pay increase, Congress gives them a 3.5% pay increase to show they are “supporting the troops.”
I’m not sure I agree with your 1970 baseline as the standard for this, especially given we had a draft. Suggesting we need to keep a military force similar to Vietnam or the Cold War is likely misguided. There is tons of waste in our military (partly because of pork barrel politics), and we spend a lot more money pursuing stupid foreign policy goals rather than smart ones using our military.
You have an interesting idea on what has created wealth disparity, but I haven’t done enough reading to know whether it has any basis, especially given the confounding effect of the draft. I’m not really convinced that the typical entitlement dweller who is there by choice would have been a member of the military in the 60s except by drafting them.
Pickup truck sales correlate more closely with the housing market than with gas prices. With the housing market finally recovering, pickup truck sales are bound to go up.
As others have pointed out, why buy a penalty box subcompact when compacts and even some midsize cars offer similar fuel economy, more room and more powerful engines? The Versa is the only one that’s doing all that well because of its combination of cheap price and big interior room. It also helps that the Sentra isn’t that good a car.
Funny, but Fed policy and interest rates tell a different story.
>>OMG. Now someone in this thread is citing a right-wing, no-name hack journalist as if he were a real economist.<<
Your ignorance is catholic. James Grant is very well known and that quote came from the Washington Post.
I am sure James Grant is a very fine fellow. He has a self-published news letter on interest rates he sells to the public. He has a masters degree in international relations. Ron Paul, who wants to abolish the Fed (imo. not one of the libertarians’ better ideas), wants to appoint him to replace Ben Bernanke as Fed Chairman. These are not serious credentials in the world of real economists.
Manufacturers need small cars for CAFE, whether the market wants them or not. Isn’t that the reason for Mini and Smart?
Low margin, low volume. Not an appealing segment, from a business perspective.
“Low margin, low volume. Not an appealing segment, from a business perspective. ”
I totally agree. However, I don’t think the manufacturers need them at all.
Those subcompacts still need to pass crash, passenger safety, and pedestrian safety requirements. They still need 4 wheels and reasonable handling. Short and stubby cars are likely less aerodynamic than longer counterparts. And, because in the USA people are willing to pay more for larger vehicles, those subcompacts need to meet all those same requirements while costing less.
The difference between the Prius and Prius C can be instructive. The Prius C, because it is smaller, needs to sell at a lower price point. Because of this, it gets a less expensive drivetrain and so the EPA benchmark is actually lower (even while being smaller and possibly doing better in the real world). The market has spoken here: the subcompact, while somewhat less expensive, doesn’t sell well and also doesn’t do as well in EPA benchmarks.
If anything, manufacturers need gimmicks such as large-footprint light trucks, electric vehicles, and ethanol to pass CAFE.
If you look only at the US market, then these subcompacts make no business sense, but most of these models are relatively big sellers in other markets where fuel prices are double or more of US price. Thus there is some opportunity to make money with the volume from these other markets, and the cost of federalizing to US standards the same basic car are relatively small and worthwhile due to CAFE requirements and PR purposes (i.e. see we provide small cars and no one buys them).
That is not a reason they sell well they are much better Off Road and carry vastly better Payloads when used as a work or RV vehicles. Still like the US we have “Urbane Cowboys” that use them SUV’s with beds, which is basically bulk of the usage you get in the US, not so much here.
This shouldn’t surprise anyone. This is a result of midsize cars getting better mileage. For most people driving 12-15k miles, the returns on better mileage become minimal above the 30 MPG barrier. At 15,000 miles and 20 MPG, you use 750 gallons. 30 MPG would be 500. 40 MPG changes that 375 gallons. So the same 10 MPG improvement from 20-30 yields twice the actual savings. And a 40 MPG car only saves about $430 over a 30 MPG car. Those midsize sedans no longer involve any real MPG sacrifices, and even trucks have made big improvements. If you then add cars like the Fusion Hybrid, subcompacts become all but obsolete, except in their cheapest forms (like the Versa).
Exactly, the biggest reasons for subcompacts is price, where nissan excels.
I’m just back from the dealership, and Nissan really does NOT excel at price – when apples to apples. I can get base Fit for $16..17k, whereas the cheapest Versa is $18k because of $1500 “market adjustment”. That said Versa comes with window cranks. Nissan people are making excuses that they are switching to Note, so Versas are scarce.
What Nissan really excells at is making a HUEG “subcompact”. Versa is long like weiner dog, the rear seat space is like a limo.
According to Nissan’s US site the Versa sedan starts at 12K and the hatch at 14,600, so with destination that’s mid 15s. How they are tacking $2500 “just because” sounds fishy. Cube starts at 16,700 plus dest… how much were those at this stealership?
$21k base for Cubes
Sounds like price gouging to me.
Yes, I don’t see subcompacts as “hedging [automakers’] bets.” Those cars will never outsell their larger siblings in the US unless gas prices/taxes & legislation get turned on their heads.
True, but don’t forget that there is a small market for these vehicles based on their SIZE, rather than price/mpg. I think the declining MINI sales highlight that there is a ceiling to this market. Then again, Fiat is selling 4k 500s per month which two years ago I would have thought overly optimistic.
Glad to see the Sonic doing well. I recently purchased a 2012 model (1.4T/6MT) after test driving many of the cars on the list above. I set out to buy a Mazda 2, and having finally located 1 with a manual in the area, it turned out to be a disappointment. The Versa was a horrible penalty box. It literally felt scary at 70 mph, I couldn’t believe it. The Yaris and Fiesta were just blah. The Fit was too buzzy on the freeway. The Accent was my second runner up, which was surprising to me. The Sonic drove like a car a class above with more power than the other cars I drove. Very comfortable and quiet on the freeway. The only mild gripe is the suspension could be buttoned down a bit more, but I’ve seen a measured 45 mpg at 70 mph, and the worst tank I’ve had so far is 34 mpg.
That’s awesome. If I were in the market for a subcompact vehicle, the Sonic hatchback would be my first choice. Of course, you can only *get* the 1.4L turbo-four with the 6-speed manual transmission, and I’m much too lazy to have a manual transmission in a daily-driver.
According to Chevy’s website, you can get a 6-speed auto with the turbo motor.
Its a tough sell. My Rabbit is the smallest car I’ve ever owned, and frankly I don’t see the sense in paying about the same money to get about the same gas mileage and significantly less space. Going the other way something like a Passat for another $1-2K makes even more sense if your big thing is space and value. Small cars make more “sense” where fuel or space are at a huge premium. Pretty much not the case in the US. Small cars got a blip when gas spiked, but people are used to $4/gas now.
An interesting report I saw about 4 yr ago is that it is not the price of gas that drives people to downsize their car, it’s the change in price. Once price stabilizes (i.e., it stops increasing), people feel they can budget accurately, and they go back to larger cars.
Makes sense.
agreed. small cars make sense where parking is at a premium, i.e. hard to find, there aer lots of cars on the road in a crowded city, or the owner prefers the inside space or outside footprint when driving. they do not make much sense for long trips or common long commutes unless they are comfortable for the driver.
the advances in mileage that the midsize and compact sized cars have made over the past 10 years has rendered the subcompacts mileage advantages virtually moot.
In some cases, like the Cruze/Sonic, the compacts are more efficient than the sub compacts. In almost every case the difference in fuel economy is negligable.
If someone is leasing, the Focus and Cruze tend to have a cheaper monthly payment than the Fiesta and Sonic. They are also much better vehicles.
I don’t know about the “much better vehicles” statement. I almost bought a turbo Sonic instead of a Focus recently due to its small size (more fun to drive), increased rear seat room, and foot smaller length when comparing hatch to hatch. In the end the Sonic hatch’s trunk was just too small. Someday someone will get smart and put the rear seat of a hatch on a rail so that it can be adjusted for a bigger trunk or more rear legroom.
I think that is the best thing about the Equinox/Terrian. The sliding backseat gives you either a lot of legroom or a lot of storage space.
I wish Ford would have brought the flexible seating on the Euro C-Max over to the US C-Max. It seems Europe gets much more creative packaging solutions than we do.
“In some cases, like the Cruze/Sonic, the compacts are more efficient than the sub compacts. In almost every case the difference in fuel economy is negligable.”
The general trend is that subcompacts have too high a height/length ratio to be sufficiently aerodynamic to out-mpg compact cars on the hwy. Also, smaller, less-powerful engines will have a peak efficiency at a lower speed than larger, more powerful engines.
However, they WILL generally out-mpg compact cars in city, because their lower weight is the most significant variable. Relying on the anecdotal evidence I have heard, it seems that subcompacts DO get noticeably higher real-world mileage because they typically used as urban vehicles where their advantage is greatest.
For the example of the Cruze/Sonic, using both with ATs & LS trim: 22/35 = 25.8 combined v. 25/35 = 28.2 combined. I would expect people to see ~10% difference in the real world, which I would not consider negligible. (Not the best example, though, because both use the same engine.)
These cars are the mystical brown diesel MT wagons. Only those who have them “get” them.
-they aren’t much cheaper than the larger models in their manufacturers’ lineups. Some, like the Fit, can be more expensive than the baser Civics
-they don’t get much better fuel economy than their siblings
-they have less horsepower
-they have less passenger space
-they are hatchbacks, which is seen as some kind of poison to the American market
Buying a car because it’s “small” doesn’t appeal to many car buyers, and that’s subjective because they’re not that much smaller unless you get the clown car iQ or Smart. And in America, where most streets, parking spots, garages, drive-thrus, etc. can accomodate a 3/4 pickup, there’s no real advantage of such a micro car.
Key word being *most* streets. These vehicles make perfect sense in urban areas.
And a regular small car like a Civic, Mazda3, Impreza wouldn’t?
A Focus hatchback is two inches shorter than a Fiesta sedan and eleven inches longer than a Fiesta hatchback. It is also much nicer than either Fiesta, and the 2.0L is so much better than the 1.6L.
In almost all urban enviroments, there will be no noticable difference in parking. Only when you get to the iQs and Smart cars do you get increased parking utlity.
Comparing a hatch to a sedan is apples to oranges. The Sonic hatch is a foot shorter than a Focus hatch.
Tbone, I stated that the fiesta hatch is about a foot shorter than the focus hatch. A foot will not make a difference in almost all of the US. Only those in certain urban areas will see an advantage to a subcompact.
My bad on not seeing the hatch comparison.
11 or 12 inches does make a pretty big difference when parallel parking. Maybe I am an exception, but I end up parallel parking in a crowded area at least twice per week, and have done so three of the four cities I have lived in.
Our Focus can park itself so its been a non-issue. I will admit that the cities we have lived in (Detroit, Tucson, Pleasanton, CA, Columbus, and now again Detroit) don’t have a ton of parallel parking. I’ve never had to park on the street while at home in my life. I can understand having a subcompact in Chicago, San Fran, etc.
Unfortunately, where I live my Mazdaspeed3 is too long for many parking spots. I never thought I would say it, but sometimes a Smart car would be nice (to park, not to drive obviously).
Americans will always drive the biggest car they can afford to buy/operate. In the US small car = loser. Been that way for a very long time.
But if the bigger car is just as efficient, more comfortable, and basically the same price, doesn’t that automatically make the smaller car a loser? If I don’t have urban space constraints, what is the advantage of a Mazda2 over a Mazda3?
A quality 2-3 year old Fusion or Malibu is almost always the right answer for an American’s transportation needs.
With a smaller car, I can grab parking spaces that land yachts had to pass up.
But mostly, I love my money more than I care about an image projected onto me by people shallow enough to worry about what I drive.
Larger cars have gotten more efficient, so the fuel economy penalty is narrowing but I can still save more than a few bucks on the purchase price, again on the insurance and tax bill and every couple of weeks at the pump if I go with a small car that meets my actual needs.
I don’t think there’s 5 people where I work that know what I drive, anyway. There’s many dozens who know what I can do, which leads to the image that counts.
That explains why BMW struggled to sell 3 series cars that cost as much as Lincoln Town Cars and Cadillac DeVilles in the US.
The 3 series is successful because it has been a great car for a long time. It also took BMW a long time for the 3 series to outsell the big Lincoln and Cadillac in the US. Maybe if Ford and GM didn’t produce garbage for a few years things would be different.
None of these subcompacts are better than the same company’s compact car. Some people will buy them, but the market has shown than most people will not.
CAFE may be a reason makers sell small cars in the US, but I don’t think it’s the only one. Taken together, sales of all these cars is not to be discarded. I strongly suspect they sell them ’cause they are sold in other markets, so why not produce some more and chase that elusive American buyer? Afterall I think most of them are not even built in America, but thanks to America’s free trade policy it shouldn’t really cost that much more to take and sell cars there. Similarly, if there were no chicken tax, the Thai or South American Ranger would be on offer there.
Finally, you can’t rule out changing tastes. The other day I saw a music video of one of these new artists I don’t know the name of where the girl singer was driving a 500 while a guy was driving some old Pontiac or such. Maybe Fiat paid for the placement, probably it didn´t. If the latter is the case, it just goes to show that the car is attractive to a swath of the American public, and the growing 500 sales, mini sales, among others will keep makers offering smaller cars for Americans.
There is a lot more than chicken tax to why we don’t get the global Ranger in America. Ford gets around the chicken tax with the Transit Connect, they could figure it out with the Ranger.
Maybe they’ll build the global Ranger in Cuautitlan once Fiesta production moves to Thailand.
Considering the percentage of retail pickup sales that have back seats, I doubt the chicken tax has anything to do with Ford’s decision not to bring in the Ranger. The 2014 big GM pickups are only available with crew cabs until some time later this summer. Probably the next body style to reach production will be the extended cab with half doors, and only then will they bother with single cabs for fleet sales.
Honest question CJ: Do double cab (crew) pus not fall into the chicken tax’s scope? If they don’t then I would have to imagine other reasons Ford isn’t selling the global Ranger in America. I think it could well be that demand elsewhere is so high and production of the PU is still starting that they get bigger profits elsewhere, and not that they think the Ranger is not saleable in America or that they couldn’t make a buck on it there.
I certainly don’t believe that double cabs fall under the chicken tax. Subaru added bed-mounted jump seats to their BRAT back in the day to avoid the tax. Ford ships their Transit Connects over with back seats that are then removed and discarded unless the buyer pays for them in order to beat the chicken tax today.
Ford doesn’t want to import pickups because US and Mexican made pickups are profitable. Anything that is an alternative to one is a liability. The USD is too weak. This isn’t going to change until we stop printing 85 billion dollars a month to create the illusion of an economic recovery.
Thanks CJ. What you say makes sense. So probably Americans will not get the new Ranger until they decide to produce locally (NAFTA).
Too weak compared to what? We’re up against the yen and, last I looked, holding our own against the Euro (the Euro went down, noticeably, between my last two trips to Europe, Spring ’11 and just this past March).
CJ, you are correct. Ford doesn’t want a ranger as it would be a low yield product that would cut into the sales of a wildly profitably product (F series). The Ranger could easily move to Thailand and be sold here profitably. But they won’t. That would be too much complexity with Kuga/Escape/Fiesta.
FYI – Cuautitlan stopped making pick ups 6 years ago and even then, it was Mexico only market Lobo’s.
“Maybe they’ll build the global Ranger in Cuautitlan once Fiesta production moves to Thailand.”
And once they do the Ranger will very probably be sold in America. You pretty much corroborated my opinion.
Double cab doesn’t matter. It’s just Non-NAFTA light trucks. CJ has already explained ways to get around the tax.
And even if Ford decides to build the Ranger in Mexico, which given its trade advantages would be a good choice, it coming to America isn’t a slam dunk. Ford execs have talked about how a midsized truck doesn’t compare well against full sizers in the US. They believe an actual compact truck would be a better fit.
@bball40dtw
Which is better a small SUV or a Larger one? Most go for larger SUV’s here and tend to avoid the really small CUV’s. Pickups in the US are a replacement for the large US cars of the 70’s and now combine elements of an SUV and the traditional Single Cab Pickup. No surprise the latter is dying in the US.
Robert-
In the US compact CUVs tend to sell the best. Everything Escape/CR-V to Explorer/Traverse size sells well. Even though the full size truck based SUVs don’t sell in the same volumes anymore, they are extremely profitable.
Marcelo, don’t count on it being built at Cuautitlan. Not anytime soon.
CAFE is surely not the only reason, but it is the biggest one.
A handful of Americans vote for the segment with their dollars, while half of new vehicle buyers opt for “trucks”.
Low margin, low sales. These are not appealing facts if you want to make money in the auto business.
CAFE considerations influence all makers. Honda, for example, certified their Accord CrossTour as a “Truck” and then awkwardly had to asterisk sales reports that separated cars from trucks. Accord has now been dropped from the name.
This regulation has tremendous impact on the plans and product lines of every major manufacturer doing business here.
CAFE regulations are no longer the driving force behind subcompact sales. If anything, the new “footprint” regulations will make the current breed of subcompacts obsolete by 2017. After 2017, steeply rising fuel economy requirements will no longer make the cars cheap.
I think subcompacts will only live on in the US as EVs. If economies of scale and technological advancement make EVs significantly cheaper, electric economy cars may be beneficial for manufacturers. Imo, this is the reason for the new fleet of subcompact EVs, recently released by the manufacturers.
Subcompacts became more popular as buyers were looking to save money on gas. However, manufacturers have caught up with fuel saving technology and most midsize family sedans can do mid 20s in town and mid 30s on the highway. This leaves as the only reason to buy a subcompact as purchase price or space restrictions for metro areas. That leaves a very small market for metro residents for cars such as the Mini or even LTZ Sonic and market for penalty econo-boxes for folks who don’t like to buy used. Everyone else has gotten what most Americans want: A bigger car that uses less gas.
Trucks = easy to monetize
Subcompacts = less easy to monetize
In a business environment with finite resources and high opportunity costs, manufacturers have little or no interest in devoting funds to product development or marketing for subcompacts. CAFE 2025 will require small cars to achieve over 40mpg combined, a requirement that isn’t particularly friendly to the subcompact segment.
Unless EV costs plummet or CAFE regulations are adjusted, I don’t see subcompacts surviving for much longer, despite the many redeeming qualities, which manufacturers have yet to monetize.
Imo. car guys ought to at least have a passing acquaintance with the gasoline and diesel markets. Prices here are poised to break downward. How much is hard to say. OPEC is going to have to lower oil prices in order to take the economic measure of ‘fracking’.
Subcompact car sales in low gas tax countries like the USA, Canada, Saudi Arabia, Mexico, et.al. are bound to tumble in response. In many other emerging, rapidly growing markets, they are probably going to be the wave of the future regardless of oil prices. You might take note that in much of south and eastern Asia and some of Africa, human beings in this generation are much smaller than in the Americas, Europe and Australia.
EV’s are already very, very heavily subsidized. Prospects for any huge technological ‘breakthrough’ are not in sight. Lower oil prices are likely to kill most of the urge to supply these subsidies. EV’s may eventually prevail, just not for a few more decades.
I guess the same goes for hybrids. It’s always been hard for me to see how two engines can be better than one.
CAFE? I dunno. I just see CAFE legislation, its regs and their enforcement as being more effect than cause. The Exxon-Mobile corporate planning department sees North America as being self-sufficient in mogas and diesel by 2020. I suspect it’s either that or $50 per bbl oil or maybe both. Regardless, if any of this happens, EV and hybrid subsidies, subcompacts in the USA, and today’s CAFE regs would be soon be kaput.
I don’t know what the market share for sub compacts was prior 2008 but I suspect a lot less than it is now and that is mostly because there are now more cars and brands in this arena. So, the market share is stabilizing rather than shrinking. Consider that the sub compacts on the market now are way different to those on the market 2008. Bigger inside, more comfortable and safer, it’s no surprise they are making a space for them selves.
Also consider that 50% (correct me if I am wrong) of the market are full size pickups so that makes the sub compact market 8% of the traditional passenger car market.