Filed under: Car Buying, Budget, Sedan, Hatchback
Betting on small cars…
My friend, Sam, is your classic Texan. Big home, big pool, big personality and, of course, a big car, a Chevrolet Silverado pickup that he uses a couple times a year to haul lumber and yard supplies from the local mega-mart. But most of the time he’s sitting in Dallas traffic, running up big gas bills.
And that’s got Sam thinking about whether he really needs all that much of a truck. The last couple weeks he’s been stopping by the local mega-auto mall – where, as you’d expect, they carry just about every brand of car – looking at a number of alternatives, all of them a lot smaller. A classic Chevy truck fan, he’s leaning towards the new Equinox, though he could easily afford something more lavish.
When even Texans are starting to downsize, one has to ask what’s going on in the American automotive market. “There is an opportunity in small cars,” that General Motors hopes to exploit, says CEO Ed Whitacre, with an assortment of new products such as the pint-sized 2011 Chevrolet Spark. His counterpart at Ford, Alan Mulally, echoes that view, and has ordered up a variety of new models, including the subcompact Fiesta and the next-generation Focus.
Import brands are already invested in the small car segments, with models like the Honda Fit and Toyota Yaris. Even highline makers are downsizing, with offerings such as the Mini and the BMW 1-Series.
In a nation that has long felt that big is better, why is small suddenly beautiful? The first sign that things might be shifting came in mid-2008, when U.S. fuel prices soared to record level triggering, in turn, a collapse in sales of pickups and sport-utility vehicles. The trend was short-lived, however. Even before pump prices started slipping back, small car sales began to wane.
So, why is the industry betting so big on small cars now? For one thing, most expect gasoline prices to reach $4 a gallon in the long-term. Meanwhile, tough new federal fuel economy standards also press the industry to downsize.
Paul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.
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The DetroitBureau.com on Autoblog with Paul Eisenstein originally appeared on Autoblog on Mon, 19 Apr 2010 16:41:00 EST. Please see our terms for use of feeds.