Monday, July 20, 2020

You're Witnessing the Small Car Die-Off

You're Witnessing the Small Car Die-Off

Twelve years ago when we started Subcompact Culture on January 23, 2008, we were witnessing the growth of the small car segment in the U.S.—something that many thought would never happen. After all, it was long thought that Americans didn't buy small cars. But 12 years, 5 months, and 27 days after starting Subcompact Culture, we're witnessing the segment's extinction. As much as I try not to sound fatalist here, we are witnessing the small car die-off.

Why Small Cars are Disappearing

What once was a bustling segment is now barely alive. Fuel is inexpensive. People want crossovers. The automotive market, as a whole, is in the toilet thanks to COVID-19. Small cars have small profit margins so there isn't much motivation to sell them. A dealer is going to make more off of a Corolla than they will of a Yaris, and frankly, the cost difference isn't that much more. Maybe only several bucks a month if financing. And in the U.S., bigger is almost always better. 

The sales decline has been going on for a couple of years now, but the die-off is in full swing right now as more and more manufacturers are getting rid of their smallest, most frugal, and least-expensive options. 

Ford Fiesta ST

It Was A Growing Segment

Twelve years ago, we were talking about the growth of the B-segment and later the A-segment in the U.S.; a country that didn't buy small cars. We had things like The Fiesta Movement (a groundbreaking social media marketing campaign by Ford), presentations by automakers in which we were told "small cars are the future," and nearly every automaker moving to add a small car to their lineup. Gas was expensive, the economy was headed south. People were jettisoning their gas guzzlers for smaller, less expensive, and more fuel-efficient modes of transportation, and nearly every automaker was on board. But things have changed.

Fiat 500c Abarth

The Demise of Small Cars in the U.S.

Even before the COVID-19 pandemic, companies were getting rid of small cars. Long ago, Mazda axed the Mazda2. Nissan offed the Juke. The Ford Fiesta and Fiat 500 were both killed off. Smart stopped selling the ForTwo. We were the first to report on the death of the Honda Fit back in February, something that was confirmed again by Honda last week. Then it was announced that the Toyota Yaris sedan and hatchback would cease production for the U.S. in June of 2020. We also recently heard Chevrolet will not be re-upping the Sonic for 2021.

This leaves only a handful of subcompact cars for purchase on the U.S. market. This would include the Chevrolet Spark, Mitsubishi Mirage, Hyundai Accent, Hyundai Veloster, Kia Rio, Kia Soul, MINI Cooper, and Nissan Versa. One could argue the Veloster and Versa aren't even that small, let alone any MINI other than the two-door hardtop/convertible. And is the Soul a crossover? Is it even "small"?

Nissan Kicks

Still Lots of CUV Options

Yes, you still have a host of subcompact CUVs to choose from in lieu of traditional sedans or hatchbacks. This would include the Honda HR-V, Chevrolet Trax, Buick Encore, Jeep Renegade, Fiat 500X, Hyundai Venue, Nissan Kicks, Ford EcoSport, and others. But if you're not looking for a subcompact crossover, you now have only a few choices remaining.
2021 Mitsubishi Mirage Hatchback
2021 Mitsubishi Mirage Hatchback

2021 Models Still Uncertain

Not all companies have announced their plans for 2021. We're awaiting Mitsubishi's line and whether we'll get the redesigned Mirage. We'd assume Nissan will continue to offer the recently redesigned Versa. (Then again, Toyota axed the new-for-2020 Yaris Hatchback just six months into 2020). I'd also think Chevy would keep its popular Spark. But there is much uncertainty in the world these days, so nothing would surprise me.

Times change as much as buyers' tastes in automobiles. But in just 12 years, we've witnessed the rise and fall of the small car in the United States. To put it lightly, 2020 has offered countless surprises, so anything might be possible. 


nlpnt said...

I'm now glad I snagged my 2020 Honda Fit manual in February. The pandemic alone made me wonder for a while whether I had taken on consumer debt at the worst possible time, or whether I was in the position of someone who had just bought a new 1942 model weeks before Pearl Harbor...

Socarboy said...

Small cars have always been a "knee jerk reaction" with the American public. Look for this "dead segment" of the automobile market to come alive next year when fuel spikes in price (hence the term knee jerk reaction). It is not just me whom is predicting that fuel will spike next year; UPS in the last few weeks has dramatically raised its shipping rates; they often do this when they think crude oil will increase in cost. Not to be political, but we all know our current president has had a cozy relationship with big oil. Right now they are keeping the price of crude oil low to help him get re-elected. The minute the election is over look for the price of crude oil to take off.

Luismi38 said...

In Europe and Latin America the Suzuki Swift Sport 140hp is also sold for less than 20,000 euros!

cRiPpLe_rOoStEr a.k.a. Kamikaze said...

Subcompact sedans won't die as soon, while mini SUVs below 4-metre lenght originally meant to India are likely to replace the hatchbacks.