More people are considering smaller cars

(September 27, 2010) Will your next new car  be smaller than the one you drive today? Edmunds.com has announced that compact and subcompact cars are currently being considered by 16.4 percent of its 15 million monthly site visitors, up from 15 percent three years ago.

The Chevrolet Cruze, Volt and Spark, Fiat 500, Ford Fiesta and Focus, Honda Civic, Hyundai Elantra, Mazda2, Nissan Leaf and Scion tC are all coming to dealerships soon, and today's economy-minded car shoppers are curious about them, notes a new report on Edmunds' AutoObserver.com.

2011 Ford Fiesta
draws attention
of small-car shoppers


The last time economy cars made a huge difference to the auto industry was the 1970s, when the United States' gas crisis gave an opening to newcomer automakers from Japan. However, the market share of compact cars has hovered around 20 percent for most of the past 20 years despite green trends, fluctuating gas prices and other apparent motivations to downsize.

Advances in engine technology allowed automakers to meet the Environmental Protection Agency's longstanding fuel-efficiency requirements (27.5 mpg for cars) while producing ever larger, more powerful models. Bigger cars mean bigger profits, so automakers — and not just domestic ones — largely followed the money, which, luckily for them, mostly coincided with consumer preferences.

"Since 1990, the average car has gained 999 pounds, 14.2 inches and 118 horsepower. To put that last data point into perspective, in 1990 only 30.5 percent of new cars had less than 118 horsepower total," noted Edmunds.com Analyst Ivan Drury.

Now that each automaker is expected to achieve Corporate Average Fuel Economy (CAFE) of 35.5 miles per gallon by 2016 — or pay huge fines for missing the target — the small, fuel-efficient cars are far more significant to the bottom line.

"At the very least, these companies must recoup their sizable investments in this crop of new compact cars. Longer term, they'll need to sell enough of them to help achieve those rising CAFE numbers," wrote Edmunds.com Senior Analyst Karl Brauer in his report for AutoObserver.com.