Small Cars Sales on the Rise in the U.S., Could Account for 20 Percent of the Market this Year

Tuesday, October 09, 2012Categories:Chevrolet,Ford,GM,Honda,Reports,Toyota |
Big may be beautiful, but when reality bites, small can prove to be a choice that makes more sense. High fuel prices, along with the fact that subcompact and compact cars are better than ever have resulted in the small car segment being on track to achieve its best-ever market share since 1993 when it held 20.5 percent of the market.

Last month, sales of small cars exploded by 50 percent compared to the same month in 2011 according to Autodata Corp. As a result, the segment accounted for 20.2 percent of September deliveries, the most since July and August 2009, and 19.3 percent of the market year to date.

This trend signals a change in new car buyers’ choice, according TrueCar.com industry analyst Jesse Torpak.

“Traditionally small cars were purchased by people who couldn’t afford anything else”, he told Bloomberg News. “Right now, that’s not the case. We see people choosing them because they find them more appealing”, he added.

Tom Libby, an analyst at R.L. Polk & Co., concurs that current small cars have improved significantly: "Whether it's the Civic or the Focus or the Sonic or whatever, everybody agrees these are much, much better cars with more integrity than their predecessors."

Brands like Toyota or Honda are leading the trend, as they have traditionally been very strong in this segment, but U.S. carmakers are threatening their dominance.

In fact, GM’s Chevrolet was the best-selling small car brand in September thanks to its Sonic and Cruze models leading the subcompact and compact segments respectively.

Moreover, Ford’s small car deliveries were the highest in any September in a decade with the Fiesta selling 24,628 and the Focus 19,736 units.

The Chrysler-Fiat Group also had a very good month: the Fiat 500 mini sold 4,176 units, up 51 percent, and the Dodge Dart that was launched in July sold 72 percent more cars than in August.

"It's cool and hip right now to be frugal", said Tamara Darvish, vice president of Darcars Automotive Group in Silver Spring, which owns seven Toyota and Scion franchises. "Consumers are thinking much more logically than emotionally compared to how they did in the past."

By Andrew Tsaousis

Story References: Bloomberg