Small Cars Making a Big Splash in North America

It's been a while since the sub-compact car marketnew Honda Fit for example,
has garnered such attention ingets an estimated 33 miles per gallon in the city, 38
North America. Our friends in Europe have alwaysmpg on the highway.But these are no one-show
known the virtues of small cars.ponies. Beyond fuel efficiency they offer respectable
But here in North America, SUV's have dominatedperformance. The Toyota Yaris has 106 horsepower
parking lots at the local Pier 1 forwhich may not sound like
more than a decade. However as current gas pricesmuch, but tipping the scales at only 2315 lbs, it has a
inch forward and with futurepower-to-weight ratio close
prices looking uncertain (and by uncertain I meanto that of the 220 horsepower Hummer H3. And
they're certainly going to bethese cars can carry just about
higher than today) more people are buying small,anything. With the rear seats up, the Honda Fit can
fuel-efficient cars. We've seen aswallow 21.3 cubic feet of gear.
lot of activity in the segment recently. Toyota hasA Ford Crown Victoria by comparison can hold 20.6
introduced the Yaris, Hyundai hascubic feet worth of cargo in the
significantly revised the Accent, Kia has updated thetrunk.The domestics haven't invested much in this
Rio, Honda has just introducedclass recently, if ever. The Chevrolet
the Fit, and Nissan will introduce the Versa in May ofAveo is essentially a re-badged Daewoo and doesn't
this year. And let's not forgetoffer the level of refinement as
Scion with the xA and xB.Having a car in thethe others. The Ford Focus is larger and more
sub-compact market makes sense for a variety ofexpensive, as is the new for '06
reasons. First,Dodge Caliber. But with the uncertainty of gas prices
it introduces new, young buyers to the brand. If theirand growing competition in
experience is good they'll stickthe segment, GM, Ford, and DaimlerChrysler would be
with the brand as they grow up and move to a largerwise to offer competitive
vehicle. Toyota, Honda,offering in this segment and introduce first time buyers
Hyundai, Kia, Nissan, Volkswagen, Mazda and othersto their respective brands.
all got their start in the sub-For most manufacturers, having competitive
compact car market. Secondly, it provides a safetysub-compact cars has grown the
net during economic downturns.business and created brand loyalty, something the
If gas prices rise unexpectedly, the knee-jerk reactionfolks in Detroit have been trying
is to get a small, more fuel-to do for a while now.
efficient vehicle. And these cars are fuel-efficient. The