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Small Cars Making a Big Splash in North America

It’s been a while since the sub-compact car market has gotten any attention

North America. Our friends in Europe have always known the virtues of small cars.

But here in North America, SUVs have dominated the parking lot at local Pier 1 for

more than a decade. But as gas prices are now inches forward and with the future

prices seem uncertain (and uncertain means they will always be

higher than it is now) more people are buying fuel-efficient small cars. We have seen a

a lot of activity in the segment recently. Toyota has introduced the Yaris, Hyundai has

Significantly improved the Accent, Kia has updated the Rio, Honda has just introduced

Fit, and Nissan will introduce the Versa in May this year. And don’t forget

Scion with xA and xB.

Having a car in the sub-compact market makes sense for a variety of reasons. first,

it introduces new, young buyers to the brand. If the experience is good, they will stay

with the brand as it grows and moves to larger vehicles. Toyota, Honda,

Hyundai, Kia, Nissan, Volkswagen, Mazda and others all started in the sub-

compact car market. Second, it provides a safety net during economic crises.

If the price of gasoline rises unexpectedly, the knee-jerk reaction will be to buy less and more fuel.

efficient vehicle. And these cars are fuel efficient. For example the new Honda Fit,

gets about 33 miles per gallon in the city, 38 mpg on the highway.

But these are not one-show ponies. Beyond the fuel efficiency they offer respectable

performance. The Toyota Yaris has 106 horsepower which may not sound like much

much, but tipping the scales at just 2315 lbs, it has a close power-to-weight ratio

for that of the 220 horsepower Hummer H3. And these cars can only carry it

whatever. With the rear seats up, the Honda Fit can swallow 21.3 cubic feet of gear.

A Ford Crown Victoria by comparison can hold 20.6 cubic feet worth of cargo

seller.

Domestic has not invested much in this class recently, if ever. Chevrolet

Aveo is essentially Daewoo badged again and does not offer the same level of refinement

apart. The Ford Focus is bigger and more expensive, as is new for ’06

Dodge Caliber. But with the uncertainty of gas prices and a lot of competition

about, GM, Ford, and DaimlerChrysler would be wise to offer competitive

offers in this section and introduces the first buyers to their respective brands.

For most manufacturers, having a competitive sub-compact car has evolved

business and create brand loyalty, something people in Detroit have tried

to do for some time now.

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