Are Americans Finally Learning to Think Small?

FIAT 500 Abarth, rear

The jury is still out on the question of how serious Americans are about converting to smaller, greener cars. Still, there is some evidence that the market share for these vehicles is increasing.

In March, small car sales went up, as people reacted to rising gas prices. Honda was the only one of the majors whose sales dropped (by 5 percent). In April, demand for smaller cars went down: sales of the Cruze fell 5 percent; sales of the Fiesta, 44 percent.

One takeaway is that people are confused about what they want and need in an economy that is anything but reassuring and sends out ambiguous, even contradictory, signals.

But what about the real small stuff and the EV-hybrid bunch? We talked about Chrysler yesterday, and the company sold 336 percent more FIAT 500s (3,849 cars) than it did a year ago. Finally, Chrysler brought in new marketing blood.

The smart fortwo, butt of many jokes, achieved 64 percent better sales in April. Toyota is crowing that its Prius Plug-In (PPI) outsold the Chevy Volt and Nissan Leaf in April. Customers bought 1,654 PPIs, 1,462 Volts and 370 Leafs.

Sad news for the Leaf, but the big surprise here is the Volt, which is beginning to show some consistent gains. And it should: It is a different car from the PPI (which can go only 11 miles on electricity; the Volt will get you 35, and the engine runs only to charge the battery). See some informed comments on this post. The PPI costs $32,000, the Volt is $8,000 more.

Though Toyota has the name recognition and many years’ advantage in building good hybrids, I think Volt-type cars will beat them in the end. But only if GM finally gets smart and builds a cheaper, different-style Volt. Once again, this shows GM’s total misreading of this market.

Scion iQScion builds a great little super-mini, the iQ, which is showing good sales numbers in Europe and Japan and is selling a few cars in the U.S. (Read a full and fair review here.) Inexplicably, the company is dropping its two bigger sedans, leaving not much else, and one wonders what Toyota is thinking.

It will take more years and more gas crises—not to mention much better marketing—to sell mini-compacts like the iQ to any substantial number of city-dwellers. But trends over the last year clearly show that EVs and hybrids can follow in Toyota’s footsteps.

Or, if they’re smart, carmakers can develop something a lot better, build it to a price, and sell it with a serious public education campaign.

Small cars can be built, marketed and sold the way Apple developed and marketed its iPod. Do you agree with that statement?


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1 Comment

  1. I don’t agree at all. Apple is the kind of product that is built in foreign sweatshops by a company that uses every financial trick and loophole to avoid paying their fair share of taxes, and markets their products at the highest price they can wring out of consumers, usually at least twice what competitive products cost. It’s kind of embarassing that so many are willing to buy from such an unethical, underserving company. If that cute Scion IQ was sold by Apple, the price would be #39,000, not $16,000.

    There are advantages and disadvantages to driving any type of car, and as Americans have more choices, including small cars that have decent quality instead of being cheap, rattling death traps, I think sales will condinue to go up for small cars. However, I think the typical customer will be like myself, someone who already owns (and is keeping) a larger vehicles. We drive whichever one is best for the job at hand.

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