The Mitsubishi Mirage is going to Car Heaven soon, but at least it won’t be lonely up there. Soon it will be joined by the Kia Rio, a relative steal these days at $16,750 for the sedan and $17,690 for the five-door hatch. It’s now due to be canceled, and the dwindling affordable subcompact car market in America seems likely to go with it.
That leads off today’s morning news roundup. Also on tap: an unexpected way to score a cheap car deal right now, the latest on a potential United Auto Workers strike and somehow, VinFast’s stock price is popping off—but we’ll dive into why that’s the case. Let’s do this thing.
Adios, Rio
Photo: KIa
The affordable subcompact is perhaps the most noble of all the cars. It does its job without glory—even pickup trucks get some of that—yet it’s no less necessary to countless people who just need to get around. Because sometimes you just need a cheap, small car. Maybe it’s for your kid in high school; maybe it’s a post-college ride when you’re still working for that thing you really want; or maybe you live in a city and need a car sometimes, but need easy parking even more.
Sadly for all involved, America’s cheap subcompact market is vanishing rapidly. In recent years we’ve seen the death of the Mazda 2, Honda Fit, Chevy Spark and Sonic, Ford Fiesta, Toyota Yaris and Yaris Hatchback, the aforementioned Mirage and the Hyundai Accent.
Now the Accent’s platform-mate, the Kia Rio, is on the way out too, taking with it one of the very few sub-$20,000 new car options America had left. From Automotive News:
Kia America’s Rio subcompact car will not return for the 2024 model year, the company confirmed. It follows the demise of its small Hyundai counterpart, the Accent, discontinued after the 2022 model year.
Though Kia said it will remain in the sedan business, Americans are leaning toward larger, higher-riding crossovers. Light trucks, a category that includes minivans, crossovers, SUVs and pickups, accounted for 79 percent of all new U.S. vehicle sales for the first six months of 2023 .
That trend was reflected in Rio sales. The Rio ended 2022 with sales of just 26,996, a 14-percent decline, according to the Automotive News Data & Research Center. Through July of this year, Rio sales are down 2 percent.
Buyer trends are partly responsible, for sure. (As is cheaper gas in the fracking era.) But the automakers are also all too happy to push you into bigger, more expensive cars at longer loan and lease terms, and the way new car technology is evolving makes “cheap” harder than ever to do. I can’t mourn the Kia Rio as some great icon of motoring, but the lack of choices in the market—as well as the many negative effects of upsizing—is disappointing to see.
At least Kia still makes the Forte, which is a good little sedan option. For now, anyway.
Want A Cheap Car? Lease An EV, Apparently
Photo: Tesla
But if you do want to find “the most affordable way to get a new car of any kind,” the best way to do so is leasing an electric vehicle right now, also according to Automotive News. The publication cites a study from Energy Innovation, a nonpartisan energy and environmental policy firm. Its data reveals that between price cuts from dealers themselves, aggressive tax subsidies, and using no gas and lower maintenance, an EV lease could save you a ton of money all around.
Here are some charts:
And here’s a summary from the study itself:
Our analysis shows that while EVs are cost competitive even without federal incentives, the IRA federal EV tax credit makes EVs significantly cheaper than gasoline-powered vehicles. The federal EV tax credit makes average monthly lease prices 12 percent cheaper for leased vehicles that pass the incentive along to lessees, making almost every EV model cheaper to lease than gasoline-powered alternatives in most states.
Increasing competition among EV dealers with new incentives and growing inventories is creating significant price declines; last month’s average transaction price for EVs was 20 percent lower than the same time last year. EV ownership savings could also expand further if oil prices increase again to anything close to 2022 levels, about 40 cents per gallon more than their current level.
This dynamic is most apparent for leases, but is also significant for new vehicles financed to own. For new car buyers uninterested in leasing, financing new EVs is often cheaper than financing equivalent gasoline vehicles, an important angle considering nearly 80 percent of Americans finance new car purchases.1 While higher interest rates make financing any car more expensive than it was a year ago, many EVs in many states are still cheaper to finance and own per month than an equivalent gasoline vehicle.
Altogether, EVs are cheaper to lease than their gas counterpart in every state but one for all the models we evaluated, except for the Ford F-150 Lightning. On average, leased EVs were $220 cheaper than their ICE alternatives on a monthly basis.
EV ownership isn’t for everyone, and charging is still a pain in the ass (unless you drive a Tesla, in which it’s generally pretty fine these days.) But if you take the leap, it might be easier and cheaper than you might think. Get the full report here, I’m still parsing all of it myself.
Ford Votes ‘Yes’ On Strike Authorization, Stellantis Gets Hit Hard By UAW
Now, for the latest on the ongoing union contract negotiations between the UAW and the Big Three automakers. Workers are currently holding a strike authorization vote, which doesn’t mean they’ll go on strike but that they’re giving leadership the go-ahead to do that later if negotiations don’t go the way they want. It sends a powerful message to management, too. Ford workers in Louisville have already voted 99% “yes” to authorize a strike.
Meanwhile, Stellantis finds itself perhaps the biggest target for the UAW this time around—an unusual turn for the Chrysler brands, usually the “smallest” of the Big Three. But this isn’t Chrysler or even Fiat Chrysler anymore, it’s a massive global company. And the union wants to send a message there, too. From The Detroit News:
The automaker, now known as Stellantis NV, is in a different position than it was during the previous talks in 2019. Since the 2021 merger between Fiat Chrysler Automobiles NV and French competitor Groupe PSA, Stellantis has become the fourth-largest automaker in the world by volume. CEO Carlos Tavares has emphasized execution, and Stellantis’ $8.88 billion adjusted operating income in the first half of 2023 makes it more profitable than either General Motors Co. or Ford Motor Co. in North America. It’s the automaker yielding the fattest profit-sharing checks — at $14,760 for 2022 — for the autoworkers.
[…] “Stellantis has emerged as an economic powerhouse and is producing really record profits, and as a result, it is very prominent in these negotiations,” said Harley Shaiken, a professor at the University of California, Berkeley, specializing in labor and the global economy. “They have record profits, and (Stellantis CEO Carlos Tavares) is talking about how do we reduce costs. It makes it more possible for them to be a target.”
Now with Stellantis surpassing its neighbors in money-making, the UAW’s public messaging has proved relentless. Fain has made personal attacks on the automaker’s top executives and thrown a proposal from the automaker into his office trash can during a Facebook livestream. The UAW Twitter account has shared memes and information scrutinizing the “lifestyles of the rich and famous.”
Tavares, whose total compensation was $26 million last year, is urging the company and its workers to find cost savings everywhere they can with the electric-vehicle transition underway.
Bloomberg said that the spectacular first-day pop “added $39bn to the net worth of the chairman Pham Nhat Vuong.” The stock has since snapped back, but with a $36bn market cap, the sugar-high from the listing still hasn’t worn off.
The press articles all mention that the chair controls 99 per cent of newly listed VinFast. But that’s not just an aside: it is the story. This is no conventional de-Spac; rather it resembles a backdoor listing into an empty listed shell. And the stock price is just an arbitrary number on a screen, not the market’s judgment of the company’s worth.
This is all complicated Wall Street Black Magic stuff, but without going into SPACs, de-SPACs and reverse mergers, here’s the important part:
The worry here is that retail investors might buy VinFast shares in the mistaken belief that the stock price reflects the collective market judgment. In fact, almost no market players have validated the valuation. After filing with the SEC, VinFast withdrew its IPO and so never tested investor appetite. And nearly all Spac shareholders redeemed for cash instead of taking VinFast shares. In June VinFast tried to raise $250mn via a PIPE (private investment in public equity), which is a common feature in de-Spacs, but dropped the idea.
In short, this is kind of all bullshit. The FT calls it a “spac oddity,” because maybe someone was listening to Bowie that morning. But if you’re expecting this to turn into the next Tesla, I have a bridge to sell you.
Your Turn
Is the death of the small, cheap car market really a bad thing? Or will it ultimately be no great loss to consumers?
149 thoughts on “America Is Witnessing The Death Of The Subcompact Car”
Small Cars are just becoming Small Crossovers. Nobody ever really wants a compact car, though it is true that more and more the compact at the 20K range is all you can really afford. this is partially because inflation for 2021 and more so in 2022 has outpaced average cost of living wage hikes. 2022 was 8 percent inflation with the average cost of living raise in the 3-4 percent range. this year if you did not get a substantial raise, you are likely to see another deficit in this arena. Predictions are the inflation average of 2023 to be 4.5%, the average COL raise is 3%, Maybe a smidge higher, but that means in the past 3 years the ability to buy the things you need, like cars and food has reduced greatly for many.
The problem with small crossovers is that they’re smaller than small cars.
I’m a mid-size bear with fairly broad shoulders and pretty long legs. I can fit in a Rio without much difficulty – I’m not bringing friends in the back seat but I can get a comfortable driving position.
A while ago I just happened to be in a Hyundai dealer and attempted to sit in a Venue. I couldn’t fit. There was not nearly enough shoulder room. I couldn’t get the seat in a position where knees didn’t hit the dashboard. I haven’t been that cramped since when I tried to sit in a Kei truck.
A Venue is substantially less car for more money than a Rio, no wonder Hyundai/Kia would rather sell that.
The problem with small crossovers is that they’re smaller than small cars.
Exactly this.
My folks recently got a CR-V after decades of hatchbacks. I gotta say, the back seat is unpleasantly cramped, and I’m not a tall man. We also struggled to fit specific cargo items in there which used to effortlessly disappear into a PT Cruiser — and the CR-V is a 12″ longer, 3″ taller, and 6″ wider.
Objectively, the CR-V has more cargo volume and passenger room, but that room is rendered less usable in the pursuit of off-road styling. A crossover has less usable room and lower efficiency than a similarly-sized hatchback, and a 3-row SUV doesn’t come close to competing with a similarly-sized minivan. Crossovers certainly look roomy and comfortable, but I’ve yet to sit in one that delivered on that promise.
I think that’s what we sacrifice as the automakers switch to crossovers — we’re sacrificing usability for styling, and capability for the appearance of capability.
This isn’t really limited to just crossovers IMO, because all cars have been subject to a lot of changes in the name of safety and crash protection and that’s continued to expand with every model generation. Higher beltlines for side impacts, thicker pillars and rooflines for rollover safety and packing more airbags, etc etc. A new Civic is as long outside and has the passenger volume inside of the Accord of the early/mid 90s, but doesn’t feel like it, the Accord had an airier feeling cabin.
The PT Cruiser was a model of space efficiency, safety-wise not so much. And of course you could take the rear seats out of a PT Cruiser completely so it’s a bit mismatched. Toyota doesn’t even want you to remove the 2nd row seats from the Sienna minivan, as they have airbags in them.
It used to be more of the norm too! Earlier RAV4s and CR-Vs had seats that tumbled and/or removed. But I do get the sense removable seats in general are getting too tricky to accommodate on top of all the other safety standards, even in segments that usually had them – aka minivans.
Well that one time cars keep getting bigger, no unexpected automaker from across the Pacific swooped in. Then we definitely didn’t have to bailout are own domestic market in part because of their inability to compete with these non-existent automakers. You know the old saying, history only happens once. Definitely won’t see an increasingly urbanized consumer looking for cheaper, small transport. Good thing theirs no Pacific nation with massive industrial capacity, that could focus on quality slightly and compete.
While a new car purchase has never appealed to me,( I’ve always subscribed to the more than twice the car for less than half the price used) I am doubly so since cars have become fast obsolete subscription smart phones that I can’t repair myself. I lament the current acceleration of this trend of not real ownership, and tech reliant nannys , that people are off loading responsibility to. Seems the only voice heard is $
I’ve considered the possibility of owning only 20th century cars from now on. Everything made in the 21st century has some degree of computerization and proprietary BS getting in the way of servicing and repairs.
This is why I bought a ’95 Mustang. Electronics, yes. No traction control, ABS is a suggestion, and anything that goes wrong in the drive train can be handled without a $200 diagnostic tool.
Now if it could just install its own transmission, I’d be on easy street
I am of a slightly differing opinion in that I think the sweet spot is the 21st century stuff without MDS, AFM/DFM or Cam phasers is pretty good to work on and makes decent power. I have a 2013 Dodge with a manual trans which does away with the MDS, that is Nice touch and I hear some of the pandemic era 5.3 were made without DFM, that might be a thing. but otherwise much of anything made these days seems like a nightmare to make last much past 80k miles. Except maybe Toyota products.
It varies by manufacturer. Gave up on my 1997 900se Saab turbo conv. after 180k mi. of good times, have a high end code reader, was able to bypass the immobilizer and ran for another 15k after. then would not run. Have friends with shops, none had spent $10k + for Saab software. MO , target bottom of the depreciation curve, affluent neighborhoods that pampered, keep looking till you find the gem.
Is the loss of cheap, small, efficient cars a bad thing? Yes.
Is it a real loss to consumers? Not much. The sales numbers show people were hardly buying them.
correct. having a commuter car and a weekend toy or even Hauler is not feasible at the current average vehicle price. SO you pay more for say a truck with 400 plus HP and interior like a 90’s Cadillac and it becomes a swiss army knife vehicle for many.
Exactly. By simple virtue of the fact that you are reading The Autopian, you are not a typical car buyer. Show the typical car buyer a Rio5 and a Soul and tell them the Soul will cost an extra $25/month, and they’re buying the Soul.
Is the death of the small, cheap car market really a bad thing? Or will it ultimately be no great loss to consumers?
Yes it is. This means that older cars that pollute worse and that are in worse condition will be driven longer as they cannot be replaced so you’ll end up with people literally driving the wheels off their cheap cars resulting in more accidents.
The people who decide to buy more expensive cars when a cheaper car would work for them will have less in the budget for quality tires, regular maintenance, etc.
Also more expensive cars generally mean more expensive insurance and sadly there are lots of people who’ll drive without insurance (where it’s legally mandated) which overall will result in higher insurance costs for everyone which creates more drivers who cannot afford insurance, so on and so forth.
Right now I’m walking everywhere I go and I’m lucky enough to be in a decently walkable town so this doesn’t really personally effect me much, but it still angers me a good deal.
Also Mitsubishi sucks for getting rid of the manual Mirage just before you stop sales in the US. You should at least keep it till you pull the Mirage out of the US market.
Don’t worry, the Government will come to the rescue with another Cash for Clunkers. Money for Buyers, elimination of old polluting cars and profits for manufacturers hit hard by new Union contracts. Maybe even Government backed loans so I can buy the car that I cannot really afford and will probably walk away from once I cannot no longer pay for the repairs.
Later I’ll buy one of those new to the market, sub $20K Chinese sheet boxes.
Completely off topic here, but I just noticed today that somehow my user name got switched to my real name, which is NOT cool, and I don’t know when or how that happened.
I’ve since switched it back to what it was, but how did that happen and is there a proper email address to contact y’all about these types of technical difficulties?
I understand, this sort of this is always a PITA to solve, internet Gremlins are beyond my understanding, so all I can do is wish y’all the best of luck in your search.
The same happened to me when I officially bought my membership – I think it was related to my CC payment info. I saw it on my next comment and changed my username back.
I noticed as well. I decided to just leave it and if it fixes itself then fine. If not, well I’ll be Nick here and CoolJetta3 everywhere else on the Internet.
Because China can undercut ANYBODY. Petty shit like tariffs won’t stop them, and the gougers who left the segment wide open will get what they deserve.
People can’t afford new cars anymore, stuck buying used.
Well, we can hope, can’t we? But, it seems like the Chinese automakers want to sell expensive vehicles to us as much as anyone (Polestar, Volvo, Buick), maybe one will decide to come in at the low end eventually, but there’s been a lot of false promises from BYD, Geely, Chery, and others over the years.
Run the cafe numbers in the US…build it big to avoid legislated fuel economy or build electric. it’s a shell game and YOU will all end up with electric leased vehicles that will drive themselves out of your laneway when you miss your $3000 payment to Elon
To me it was clear years ago when everyone else decided to go upmarket in search of quick profits that the Chinese will come and eat their market share from the bottom up.
Is there, though? I know of plenty of semi-rural areas in my state where the there is far more housing than jobs, but there is no transit service of any kind to the centers of employment. And you can’t just pick up and move to the centers of employment because housing is scarce and cost prohibitive, even more so than a cheap vehicle.
I like busses in theory but whenever I think of the bus I get Vietnam flashbacks to that one pic that went around where someone who was infested with bedbugs decided to take the bus and left a little settler party behind
I like it for me, too, when it doesn’t suck. London Underground, NYC subway/rail, and DC metro are all fine ways to get around. SF’s system is.. usable but hit-or-miss. I hear Chicago’s is pretty good. The rest of the US generally has either a half-assed attempt or nothing at all.
Market forces will eventually return cheap cars to our market. Sure, it will take another five years, but it will happen.
I hate leases! Yes, they make sense in a lot of cases, but for someone like me who barely drives, they just never make sense. Instead I just eat mega depreciation. Sigh.
Because lease payments for business use (or the respective portion thereof) are tax deductible, there are situations where leases do make sense. However, sans that scenario, I tend to agree.
On one hand, leasing would make me consider some cars (like BMW or Audi) that are probably great experiences when new and then I can ditch the car before the warranty expires.
But I’ve only owned Asian brands that have proven to be reliable, and at this point in my life it would feel strange to buy a car that didn’t come from Japan or South Korea.
That trend was reflected in Rio sales. The Rio ended 2022 with sales of just 26,996, a 14-percent decline, according to the Automotive News Data & Research Center. Through July of this year, Rio sales are down 2 percent.
Because, guess what? Cars don’t sell if people don’t want them. And people want giant SUVs because maybe then they have half a chance at seeing around the giant fucking pickups and other giant SUVs. Or surviving an accident. Things have gotten so absolutely ridiculous that in a WK Jeep Grand Cherokee between two 2023 F150’s, all you get out your massive rear side windows is pickup bed. Granted, the WK is only a few inches longer than a Rav4 (no, seriously,) but it’s a LOT taller.
And with current interest rates? Buying anything like a Rio doesn’t make sense for anyone. I’m seeing interest rates for subprime that are literally illegal in any civilized country or state. You think 10% prime is bad? New, subprime, and sub-subprime are getting socked with over 27%, 30%, even 35% APR.
In June VinFast tried to raise $250mn via a PIPE (private investment in public equity), which is a common feature in de-Spacs, but dropped the idea.
In short, this is kind of all bullshit.
Which is exactly what I have said about VinFast and the entire VinGroup. The whole enterprise is based wholly on state-blessed accounting fraud, just like EverGrande. They know full well if any competent auditor looked at their books, they’d immediately ask to see the real books.
Everything about VinFast is basically a state-sponsored scam. Sure, they actually build things. And they have properties and grocery stores and hospitals. All of which are selling into a country of 100M with declining growth where the average household income is $277USD a month. Yet somehow the country is magically maintaining sub-2% unemployment and year after year of 7%+ growth in their GDP?
Yeah. We’ve seen the China ‘infinite growth, honest’ playbook before.
Is the death of the small, cheap car market really a bad thing? Or will it ultimately be no great loss to consumers?
It’s none of these things. The market is, as a point of absolute fact, cyclical. Trends come, trends go. If you want to be the cool mom in the 80’s and 90’s, you had a minivan. In the 60’s and 70’s, you had the station wagon. Everyone screamed FWD performance cars were bullshit in the 80’s, they dominated the 90’s, back to RWD in the 00’s, and we’ve come back to FWD again.
The market is dead for now. I’m not going to attempt to prognosticate on when it will come back; only that it will. Otherwise continuing on this track will cause the mythical ‘infinitely expanding’ economy to implode catastrophically, or they’ll be forced to start paying people better. And you know damn well they’d gnaw off their own leg before they’d do the latter.
But people do want them. They don’t sell because the car companies don’t want cheap subcompacts to sell because profit margins are low. They’re not marketed and dealers will do everything they can to steer economy car buyers to more expensive S and CUVs.
Was gonna say the same. Sure sales are way down, but you know what else is way down? Inventory. The Rio is one of many cars that they don’t have on lots, like ever, and then lament the fact that they aren’t selling enough. It’s annoying.
When I bought my Ioniq, it was hidden out back by the service department, was the only one they had and the salesman told me they didn’t typically stock that model but would order them for customers, mine was a special order that the original buyer bailed on because it took too long to come in. He tried to upsell a Santa Fe, and I ended up having to leave and come back the next day because of some paperwork or system issue that prevented them from changing the car from sold to back in inventory to sell. And they still never bothered to remove all the plastic film from everything, was still peeling it off random places a year later.
This was for a 60mpg, sub-$30k car at a time when everyone was bitching about both high gas prices and high car prices. Really seemed like the dealer didn’t want to sell it and maybe wanted to barter with it with another dealer in trade for a Santa Cruz or something
Car makers won’t return to lower cost and lower margin vehicles until they’re absolutely forced to by higher interest rates (even if historically low-ish, still higher than the last decade or so). As long as lenders have lax requirements and are willing to finance car notes up to a decade, the trend will continue for the foreseeable future.
Based on what? Because you have absolutely nothing to support your argument. Nothing. I have years and years of sales data and demographics showing that Kia Rio buyers? Fewer and fewer every year, and by and large people who had no choice and were getting saddled with straight up predatory loans.
Literally nobody wanted a Kia Rio. They definitely didn’t want a Kia Rio that they had to pay $40,000 for.
But sure, let’s make bogus arguments using nonexistent data that you can’t support in any meaningful way.
And let’s just talk those numbers briefly, shall we?
82,211, 1999 – the Kia Rio’s best sales year. (Also it’s worst quality year.) 40,742, 2013 – the highest sales the Kia Rio has had in the past 10 years 16,760 – how many they sold in 2017, just before releasing the new one 22,975 – how many they sold in 2018 with the really quite handsome redesign 31,362 – how many they sold in 2021, their best year in ages, because they had inventory $16,050-16,990 – the Kia Rio’s MSRP in 2021
Okay, got all that?
75,126 – how many Kia Souls they sold in 2021. 92,326 – how many Kia K5’s they sold in 2021. Yeah. Literally three times as many. (That used to be the Optima, a mid-size sedan.) $17,590-27,650 – the Kia Soul’s MSRP $23,590-25,500 – the Kia K5’s MSRP
In fact, the only things that sold worse than the Rio in Kia’s lineup? The Stinger and Sedona. They sold a whopping 13,517 Stingers and 14,625 Sedonas in 2021.
And why is that? Because gee, for a whole thousand bucks more, you can get a CUV (Soul) which gets offset by incentives. Or for a little more monthly, you can get the K5.
But that’s not even the real knife to the heart.
Nope. That’s the Kia Forte. In 2021, this compact sedan sold 113,051 units with an MSRP between $17,890 and $23,090, with frequent lease and incentive deals.
And unlike the Rio? The engine and transmission were adequate, and it came with automatic HVAC, alloy wheels, keyless entry, cruise control, AEB, lane keeping, automatic headlights, a decent infotainment system, and good cloth upholstery – all standard.
And guess what! At a $1000 down, 72 month, 13% because-fuck-you term? Your $16990 Rio is $318.98 a month, and with $1000 in incentives or $2000 for your trade, your $19,390 Forte LXS is $339.05 a month. That’s it. $20 more a month for a markedly better car.
I imagine the Soul or Forte have and will have greater incentives that would let you get out the door for the same price as a Rio. There’s no offers at all on Kia’s site for the Rio now, so seems like they’ve been planning to wind it down.
We talk about the used market too – for those shopping based on payments and/or bank approvals, a used Forte and Soul at least can strike the balance of actually depreciating and still having some factory warranty coverage left, which something like a Corolla or Civic are less likely to between their higher resales and shorter warranty terms.
A base Soul is like ~$3k more than the outgoing Rio, so yea, it wouldn’t take much for an incentive to close the price gap enough that even at a 36 month loan (oh who am I kidding, it’ll be like a 72 month loan) the cost difference likely isn’t insane for the monthly payment.
I know I’d pick the Soul in a heartbeat (I actually owned one for a few years and the base model w/ 6 speed manual transmission was a solid little car).
The writing was on the wall around 2007, when the second generation Mitsubishi Outlander was revealed and the term “crossover” as freshly minted. Auto journalists were quick to clarify the taxonomy of it and what it really meant. Initially, it was the decline of the minivan and, ostensibly, the station wagon. But now that segment has devoured virtually every chunk of market share that doesn’t start with “pickup” and end with “truck.”
When I read those early reviews, I knew there would be a loss of market share in the cynical pursuit of profits. Did I imagine it would reach this point? No, not at that time. Two or three years ago? Sure. But hindsight is 20/20 and all those other platitudes.
“Crossover” was certainly a common term by then, as it had popped up with the first wave of midsizers like the Buick Rendezvous at the turn of the decade, and I imagine it popped up even before then in the late 90s with the original Lexus RX and other smaller utes.
I think we tend to see it that way retrospectively, but because there was no true crossover outside of the immediate present tense, it couldn’t be retroactively applied to those models; not like we do today. It was really taking off in the mainstream Zeitgeist roughly around that time. I was reading a lot of the rags and online sites (Edmunds, Road & Track, Autoweek, Car & Driver, etc) and noticed it gradually creep into their parlance around that time, maybe 6 months prior.
I’d say it was certainly more casually used without the “what it is” explanation by ’07 and that’s when we started to see minivans get picked off, as Ford and GM leaned into crossovers more, so then there was more proof of the market shift. But the term itself was actively used in the new model intros and reviews for years at that point. Those links I included show it used in two separate C/D articles from 2001 & 2003 – here’s another from MT for the 2001 Tribute.
That’s fair. I suppose it’s possible I’m experiencing confirmation bias on my recollection. Although, it could probably be argued that either the AMC Eagle or XJ Cherokee were the true progenitor of that class. It’s kind of sad that two of my favorite vehicles led to the revolution that killed many other perfectly cromulent cars.
Agree with you there for sure, AMC definitely pioneered what we know now by several years no matter which automaker you consider kicked it off for the “modern era”- be it RAV4, Subaru, whomever.
The people who will really miss the cheap new subcompact are the people who aren’t talking about cars. They’re the people who go to the car lot and look for something they can afford the payments on. They are going to either try to scrape together more money or buy a used car that is cheap enough to make up for the higher interest rate.
They’re a small part of the market, but they’ll feel it. They probably won’t talk too much about it because they aren’t the ones watching market trends. They’re the college kid who wants something reliable enough to drive cross-country or the person whose car just crapped out and they’d prefer to get something with a warranty.
They’ll adapt. Some of them will be close enough to work to use an e-bike or something. Some will get a used car. Some will tighten their belts in other ways. The shittiest part of this is that the subcompact economy car is going away at the same time interest rates are going up. That’s going to make it harder for the people who would buy them.
Some won’t adapt. In many parts of the U.S., access to a car is a necessity to function in society, because there are no viable alternatives available. Increasing numbers of people at the bottom are becoming destitute, and as transportation becomes more expensive, their numbers will undoubtedly increase.
That’s true. And the rising cost of a used car is certainly getting even more exacerbated by the interest rates, which will pummel the poorest among us, who will be forced to decide between something reliable or something they can afford payments on…and then a repair bill takes that away, too.
The people who bought sub compacts have also been marketed at for years that they should be buying a crossover/suv. Also lots of friends and family have gone the crossover route, so they will end up thinking thats what they want/need anyways. This is by design in auto industry, and has created the larger margins we keep hearing about.
Ford voted to strike? Will anyone notice? Given it’s awful quality problems, copious recalls, and inability to meet product demand, I didn’t think anyone was still working over there. Heck, look at the number of vehicles vanishing off of Ford’s storage lots, even the security staff is phoning it in.
Their products have gotten so complicated and feature-laden, that it is extremely difficult to build them with few flaws off the line. A sign of the times.
True enough, but those are problems of their own making. So much of what is passed off as features are neither necessary or required for functional transportation.
I potentially see the VinFast/Group founder & owner becoming the next gen EM d-bag, maybe just of Asia who knows.
UAW should just strike now, its inevitable, going to be a disaster, and I can’t decide who will win or if they deserve it. Who cares though as I would never buy a car from any of the big 3 brands… we’ll except a Ferrari and it doesn’t count cause not UAW made.
Leasing an EV being a great choice…. story is like 6yrs or more late to the party. Its always been a smart move, never heard of the Volt/Bolt $99 lease deals, or I think Fiat 500e could be had for $49/month. BMW lost massively on my i3 leases, they even PAID me to trade in my old one and get a new one for a lower payment. This was pre-covid and my old one with a residual of $30k netted them maybe $12k at auction.
The death of the small, cheap car is a reflection that the working class who used to be able to afford them, no longer can. The bottom 80% is mostly priced out of the new car market. This is also a reflection of an industry that wants nothing available on the market but high-margin items, and of which spent billions of dollar convincing people they need much more car than they actually use. This is going to blow up in their faces spectacularly when the next energy crisis hits or if the economy completely collapses, because almost no one is going to be able to afford to purchase outright or get the loan for the expensive SUVs/CUVs/trucks that are now ubiquitous, or keep the ones they have operational, the consequence of which may be leaving the entire U.S. auto market open for the Chinese companies to take it over while dealership lots end up clogged with unsold products.
I think Tesla will be fine in this scenario(though not unscathed), but Ford and GM and Stellantis, not so much. Tesla could at least adapt because they have shown a willingness to do so.
Should this come to fruition, expect another round of taxpayer-funded bailouts and stricter regulations to protect the established industry under the guise of saving jobs that will end up automated out of existence anyway.
The emotion of buying a car for me changed from “That looks really nice, I’d love to own one of those.” to “How are they going to try and screw me over with subscription nonsense now?” Like, I’m have a hard time understanding how the OEMs expect to keep being misers and making the line go up. Apparently, there are a lot out there who are more well off than me and are comfortable owning less and less of their products.
The Vinfast thing to me reeks of illegal activity. Like makes Oceans 11 look like a candy store robbery level of fraud. But I don’t dabble in financial matters that complex, so what do I know.
We’ve given people the choice of some increasingly good cheap cars, and they largely would rather buy a slightly used, slightly bigger car (I bought my subcompact new, but I’m at 9 years of ownership with no imminent replacement plans, so I’m not really driving the new car market). As long as subcompacts remain in production in *some* market, manufacturers should be able to pivot and bring those over if there is suddenly a spike in demand, but that seems unlikely without a simultaneous spike in interest rates, gas prices, and catastrophic reliability issues.
Every now and then I see a Ford Probe GT on my way to work and think to myself: this guy has one of the best commutes of the day, as I would much rather be driving that then my family hauler. Yes to more subcompact sports cars.
Or will it ultimately be no great loss to consumers?
This one.
It bears repeating once again that if consumers demanded these cars, automakers would supply them. Look at the sales charts for every single discontinued subcompact; you won’t find many that were rising or even steady when they were discontinued.
It’s a rare person who actively seeks a subcompact out; most people who end with one are settling. And with used cars being better than ever in features, expected lifespan, and fuel economy, there’s less and less reason to settle.
I don’t believe it all the consumers fault for not asking for them, the auto makers has been marketing bigger and more expensive items, so that’s what people recognize and ask for. Just like GM killed the EV, most automakers are choosing to kill the small cars and replace with higher margin small crossovers.
If the customer discovers via marketing something that they would rather buy, they own it in happiness, and the automaker makes more money as a result, who exactly is being hurt?
And if the consumer is not happy with the larger choice, they wouldn’t keep buying them. But they do.
American car buyers have equated large size with desirability and luxury for more than 100 years. So if it’s all marketing, you have to admit it’s one of the best campaigns of all time.
The consumer goes to the lot and only sees what the dealer wants them to see which is crossovers, pickups, and SUVs. And when was the last time you saw an ad for a cheap subcompact? It’s the manufacturers that killed the cheap, new car. Not the consumer. There’s enough of a market for them to survive. And with the used car market being what it is, they really should survive.
And I will question why subcompact sales are down so significantly from 2011-15 when presumably dealer and manufacturer motivations and marketing have not changed? Note that this decline far precedes covid shortages.
Who precisely are the people that both demand subcompacts but are so easily swayed by dealers hiding them in the back lot that they buy something else they don’t really want anyways? The very idea is goofy. There is not a hidden population of small car buyers, that is wishful thinking on the part of weirdos in comment sections.
I’d say that while it’s not wrong that you can’t buy what you can’t find, it’s more true that most buyers of the cheap small cars are not really actively seeking out the specific form factor. They need low payments or they need something they can get approved on or just to get out of the current car they’re stuck in – upside down or just a money pit – or some combination thereof. And sometimes the car that achieves that isn’t the smallest one or the cheapest MSRP. Too many other factors in margins and incentives and the like.
Dealer and manufacturer motivations and marketing have absolutely changed. There is no longer a car for every budget/create brand loyalty mentality. It’s all about the highest profits right now. I’ve seen people walk onto a lot to buy a small car and driven away in an SUV. It happens all the time. It’s not goofy nor wishful thinking. I’ve always driven small cars. And I’ve had plenty of folks lament to me the demise of the small car in America. People like small cars. Many of them have just been brainwashed into thinking they need big cars and now we’re in a pointless arms race.
I remain astounded by the numerous people here who seem to believe that automakers’ profit motivation was somehow different in the past, or that Americans liked rather than settled for small cars once upon a time.
Look at the average size of cars in the 60s and 70s for gods sake. Big has been in for a very very long time.
Sure there’s always weirdos or urban dwellers that want something small. But that market is not large, has never been large, and isn’t sustainable when hybrids and high quality used cars remove the motivation to buy a subcompact for its low price and/or fuel economy.
I bought a Fiesta new in 2017. It had sat out in front of the dealership with nary a test drive for 6 months, and it was sold to me for half its MSRP. That is not the sign of a healthy market for small cars, and sales have only declined further since.
By going premium you’ve changed the direction of the conversation, but I will present you the Honda Fit instead. The last gen of the US model stopped production in 2020, so anyone that would have been happy with the cheapest Honda available now has to spend more. Yes sales were going down on the fit, but that was because it was a 7 year old model, and many people want something new and exciting, not something they’ve seen for nearly a decade. No more Fits available, so customers are sold HR’Vs. Much of this is by design from automakers, they kept stock levels low on low margin cars, and we are seeing this exaggerated even more now in the fact you cannot get a base models on more expensive cars anymore. The manufacturer and money lender are not your friends, they don’t care if you can’t buy what you want, because you will end buying something more expensive because its what they have.
The purpose of asking about premium cars was because you seemed to dispute my assertion (not very controversial I thought) that American buyers equate large size with luxury and desirability.
For that not to be true, there would need to be examples of a small car being desirable to the masses on its own merits, not just as a fallback.
The fact that Honda is successfully selling former Fit buyers an HR-V instead is evidence to me that most people didn’t really want what the Fit offered over an HR-V. To my knowledge, there isn’t a large, outraged group of HR-V owners bemoaning the lack of choices and wishing they had been able to buy a Fit instead. If that were true, they would likely be flocking to Rios, Mirages, and Versas as the closest alternative available. But we can see from the sales numbers that they aren’t.
I simply don’t accept the premise that small car inventories have been artificially restrained for a decade now (sales declines started way before covid) or that marketing tactics have drastically changed. Why would automakers build a product at all that they wanted to fail? No, the reason small car inventories are low is because there are no buyers for them.
I’ll let you have this one today, but I see it as the reason small call inventories are low is because manufacturers don’t want to spend money marketing and competing for low margins, so they have forced people to spend more on larger vehicles they tell you equate to success. Good back and forth today, I’ve enjoyed it.
Perhaps this is an opportunity for another Autopian research project like the the Trimflation article. I’d love to see actual data showing how we got to the point where cheap/small cars aren’t a thing anymore. Was it just excellent marketing? Production manipulation by the auto companies? Consumers making different choice? Or, some combination.
Trying to do that with real data in an unbiased fashion would probably very hard – ie. proving it with math. Maybe even impossible. It would be interesting.
I too would read this, and while I have my own opinions on the reasons, I’d like to see them backed up with more data than I have access to, if it exists somewhere.
My belief is that it doesn’t cost much more to make a larger car which can be sold for a higher price at a higher margin. So there’s little incentive to sell a lower-margin car whose manufacturing cost isn’t much lower.
Honda tried to improve the margins on US-bound Fits by moving assembly from Japan to Mexico for the 2015 model and the first year of production was very problematic in terms of QA and logistics, and the move probably cost Honda more than it saved.
I’d love to see an Autopian article on what typical component costs are vs. retail car price. I’ll bet a company like Munro could provide some high-level percentages without violating NDAs.
I used to work with someone who’d been in Operations at Ford and he told me that a 1993 Lincoln Town Car that sold new for $35-38K had $500 (Ford’s cost) of sheet metal in the car. If that’s the case, smaller cars probably aren’t significantly cheaper at the raw material level.
This is exactly it. They likely cost even more money than the larger cars to produce for their price point in some ways as it takes more resources to design them to pass crash testing. Other testing and certification for extreme climates, emissions, and everything else isn’t going to be much different in cost and might even be more with the greater need to reduce costs to meet a set price (hence why you see a lot of torsion beams, for instance). On top of that, they just don’t sell in the volumes of the more profitable cars. This isn’t a new phenomenon, either. Go back before the CUV plague and compacts would outsell subcompacts because they were just better deals than subs with (relatively) larger and more powerful, less stressed engines, more room, better chassis design, interiors, features, ride, and resale all for a small mileage penalty and not much more money (in some cases, a base compact’s standard equipment would about match the optional stuff in the sub so that the prices would be the same for those similarly equipped vehicles). And they weren’t much bigger externally, so they were still easy to maneuver and park. Even for small car fans like myself, the compact was always more appealing. They usually even looked better!
Volkswagen traditionally has had success selling small cars to Americans who could afford something bigger and more expensive. There are ways to market small to Americans and make it hip.
Even when the Fit was a going concern, it was not easy to find them and there was -zero- marketing from Honda or the dealers themselves, other than a half-hearted effort when the second-gen made way for the third-gen. I loved my Fit, but it was a PITA to find a dealer than had more than one or two of them in stock, even in Nothern California where I had my pick of like eight dealerships within easy driving range.
If they’d have made an Si version of the Fit that actually got out of its own way and publicized it properly, I truly believe sales would have been much, much better.
It would be interesting to see what the actual transaction prices were, because I imagine it was easy to get a Civic and Fit for about the same price out the door, and I think people just wanting the cheapest Honda are going to go Civic anyway. The Fit (and Yaris, for Toyota) were some of the first to go because the gap was pretty narrow against the next class up.
The MSRP gap between the Fit and the Civic was less than $3k, but, the margin between MSRP and invoice on a Fit was around $400-500, while a Civic was about $1600. Couple that with the likelihood of more incentives on the Civic – they built more and are going to do more to move that metal.
Would they have sold more Fits if they built more, probably, but with such a small margin I get why they wouldn’t and it’s not like we were a primary market for the Fit, whereas the Civic is a top 10 best-seller. From the consumer standpoint – if you’re in a Honda showroom, you’re looking for cheap efficient transportation, and the Civic was bigger and more powerful with nearly the same fuel economy, the Fit got maybe 10% better comparing base 2020 LX CVT models and the base Civic wasn’t even the most efficient engine. And the new Civic basically narrowed the gap.
Now, the HR-V is within $200 of the Civic, and the invoice/MSRP gap is about the same. But then the North American HR-V here is basically a tall Civic hatch, not really a subcompact SUV.
Yeah, they were mostly junk that were a worse deal than the next step up. They were not much cheaper, not much better on paper for mileage (maybe worse with the more strained drivetrain unless driven by someone who bought it as their last car), had worse quality interiors, cheesier chassis, worse ride, more tiring on long journeys, and had generally less robust drivetrains with very obvious deficiencies in power because, while the cars and engines were smaller, they weren’t correspondingly light enough since the floor for weight on a modern car just isn’t that low and certainly not for an already paper-thin profit margin car. Then there’s the psychological feeling a lot of people would have driving such a small, tinny car surrounded by distracted land dreadnoughts. Resale also tended to be worse, so there really wasn’t a compelling reason to buy.
I mourn the loss of the cheap NEW shitbox. They’ve served me and my family very well over the years. But the new SUV version of the cheap NEW shitbox doesn’t seem that different to me, just a little more expensive.
And I would argue that an SUV version is a bit more useful than the exiting sedans. They’re only about as useful as a cargo box hatchback, but better than the sedans that are exiting.
If we’re going to be stuck in a small car in a world of “Bro-dozer” oversized trucks that come huge and tall from the factory, it does take a vehicle with a higher beltline to feel remotely survivable in the daily commute.
It’s the light truck carve-outs in Federal regulations that have caused this. I wish we could turn back the clock and fix this shit.
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And here’s a summary from the study itself:
Now, for the latest on the ongoing union contract negotiations between the UAW and the Big Three automakers. Workers are currently holding a strike authorization vote, which doesn’t mean they’ll go on strike but that they’re giving leadership the go-ahead to do that later if negotiations don’t go the way they want. It sends a powerful message to management, too. Ford workers in Louisville have already voted 99% “yes” to authorize a strike.
Meanwhile, Stellantis finds itself perhaps the biggest target for the UAW this time around—an unusual turn for the Chrysler brands, usually the “smallest” of the Big Three. But this isn’t Chrysler or even Fiat Chrysler anymore, it’s a massive global company. And the union wants to send a message there, too. From The Detroit News:
Small Cars are just becoming Small Crossovers. Nobody ever really wants a compact car, though it is true that more and more the compact at the 20K range is all you can really afford. this is partially because inflation for 2021 and more so in 2022 has outpaced average cost of living wage hikes. 2022 was 8 percent inflation with the average cost of living raise in the 3-4 percent range. this year if you did not get a substantial raise, you are likely to see another deficit in this arena. Predictions are the inflation average of 2023 to be 4.5%, the average COL raise is 3%, Maybe a smidge higher, but that means in the past 3 years the ability to buy the things you need, like cars and food has reduced greatly for many.
The problem with small crossovers is that they’re smaller than small cars.
I’m a mid-size bear with fairly broad shoulders and pretty long legs. I can fit in a Rio without much difficulty – I’m not bringing friends in the back seat but I can get a comfortable driving position.
A while ago I just happened to be in a Hyundai dealer and attempted to sit in a Venue. I couldn’t fit. There was not nearly enough shoulder room. I couldn’t get the seat in a position where knees didn’t hit the dashboard. I haven’t been that cramped since when I tried to sit in a Kei truck.
A Venue is substantially less car for more money than a Rio, no wonder Hyundai/Kia would rather sell that.
Exactly this.
My folks recently got a CR-V after decades of hatchbacks. I gotta say, the back seat is unpleasantly cramped, and I’m not a tall man. We also struggled to fit specific cargo items in there which used to effortlessly disappear into a PT Cruiser — and the CR-V is a 12″ longer, 3″ taller, and 6″ wider.
Objectively, the CR-V has more cargo volume and passenger room, but that room is rendered less usable in the pursuit of off-road styling. A crossover has less usable room and lower efficiency than a similarly-sized hatchback, and a 3-row SUV doesn’t come close to competing with a similarly-sized minivan. Crossovers certainly look roomy and comfortable, but I’ve yet to sit in one that delivered on that promise.
I think that’s what we sacrifice as the automakers switch to crossovers — we’re sacrificing usability for styling, and capability for the appearance of capability.
This isn’t really limited to just crossovers IMO, because all cars have been subject to a lot of changes in the name of safety and crash protection and that’s continued to expand with every model generation. Higher beltlines for side impacts, thicker pillars and rooflines for rollover safety and packing more airbags, etc etc. A new Civic is as long outside and has the passenger volume inside of the Accord of the early/mid 90s, but doesn’t feel like it, the Accord had an airier feeling cabin.
The PT Cruiser was a model of space efficiency, safety-wise not so much. And of course you could take the rear seats out of a PT Cruiser completely so it’s a bit mismatched. Toyota doesn’t even want you to remove the 2nd row seats from the Sienna minivan, as they have airbags in them.
Oh wow, I had completely forgotten you could remove the rear seats from the PT Cruiser!
I think we took them out once and decided it was too much trouble. If I had that feature in a hatchback today, I’d use it constantly.
It used to be more of the norm too! Earlier RAV4s and CR-Vs had seats that tumbled and/or removed. But I do get the sense removable seats in general are getting too tricky to accommodate on top of all the other safety standards, even in segments that usually had them – aka minivans.
“I’m a mid-size bear with fairly broad shoulders and pretty long legs”
I reckon you can fit plenty of salmon in the hatchback, too. 😉
Well that one time cars keep getting bigger, no unexpected automaker from across the Pacific swooped in. Then we definitely didn’t have to bailout are own domestic market in part because of their inability to compete with these non-existent automakers. You know the old saying, history only happens once. Definitely won’t see an increasingly urbanized consumer looking for cheaper, small transport. Good thing theirs no Pacific nation with massive industrial capacity, that could focus on quality slightly and compete.
“History never repeats itself, but does often rhyme” Mark Twain
“History is lame as hell. Let’s rock and roll” – Gandhi
The Volvo EX30 is probably the first real salvo here, and it’ll be far from the last.
While a new car purchase has never appealed to me,( I’ve always subscribed to the more than twice the car for less than half the price used) I am doubly so since cars have become fast obsolete subscription smart phones that I can’t repair myself. I lament the current acceleration of this trend of not real ownership, and tech reliant nannys , that people are off loading responsibility to. Seems the only voice heard is $
I’ve considered the possibility of owning only 20th century cars from now on. Everything made in the 21st century has some degree of computerization and proprietary BS getting in the way of servicing and repairs.
This is why I bought a ’95 Mustang. Electronics, yes. No traction control, ABS is a suggestion, and anything that goes wrong in the drive train can be handled without a $200 diagnostic tool.
Now if it could just install its own transmission, I’d be on easy street
I am of a slightly differing opinion in that I think the sweet spot is the 21st century stuff without MDS, AFM/DFM or Cam phasers is pretty good to work on and makes decent power. I have a 2013 Dodge with a manual trans which does away with the MDS, that is Nice touch and I hear some of the pandemic era 5.3 were made without DFM, that might be a thing. but otherwise much of anything made these days seems like a nightmare to make last much past 80k miles. Except maybe Toyota products.
Right there with you. In my opinion, anything originally developed after the Japanese Financial Bubble burst isn’t worth owning.
It varies by manufacturer. Gave up on my 1997 900se Saab turbo conv. after 180k mi. of good times, have a high end code reader, was able to bypass the immobilizer and ran for another 15k after. then would not run. Have friends with shops, none had spent $10k + for Saab software. MO , target bottom of the depreciation curve, affluent neighborhoods that pampered, keep looking till you find the gem.
Is the loss of cheap, small, efficient cars a bad thing? Yes.
Is it a real loss to consumers? Not much. The sales numbers show people were hardly buying them.
correct. having a commuter car and a weekend toy or even Hauler is not feasible at the current average vehicle price. SO you pay more for say a truck with 400 plus HP and interior like a 90’s Cadillac and it becomes a swiss army knife vehicle for many.
Rio (hatch) was killed by Soul. For a couple grand more – which ain’t squat if you spread it over 72+ months – you could buy a whole lot more vehicle.
I’d take a Rio every day of the week (and I don’t actually dislike the Soul), but then again, I am not a new car buyer.
Exactly. By simple virtue of the fact that you are reading The Autopian, you are not a typical car buyer. Show the typical car buyer a Rio5 and a Soul and tell them the Soul will cost an extra $25/month, and they’re buying the Soul.
Yes it is. This means that older cars that pollute worse and that are in worse condition will be driven longer as they cannot be replaced so you’ll end up with people literally driving the wheels off their cheap cars resulting in more accidents.
The people who decide to buy more expensive cars when a cheaper car would work for them will have less in the budget for quality tires, regular maintenance, etc.
Also more expensive cars generally mean more expensive insurance and sadly there are lots of people who’ll drive without insurance (where it’s legally mandated) which overall will result in higher insurance costs for everyone which creates more drivers who cannot afford insurance, so on and so forth.
Right now I’m walking everywhere I go and I’m lucky enough to be in a decently walkable town so this doesn’t really personally effect me much, but it still angers me a good deal.
Also Mitsubishi sucks for getting rid of the manual Mirage just before you stop sales in the US. You should at least keep it till you pull the Mirage out of the US market.
Don’t worry, the Government will come to the rescue with another Cash for Clunkers. Money for Buyers, elimination of old polluting cars and profits for manufacturers hit hard by new Union contracts. Maybe even Government backed loans so I can buy the car that I cannot really afford and will probably walk away from once I cannot no longer pay for the repairs.
Later I’ll buy one of those new to the market, sub $20K Chinese sheet boxes.
Sadly that’s honestly pretty likely.
Completely off topic here, but I just noticed today that somehow my user name got switched to my real name, which is NOT cool, and I don’t know when or how that happened.
I’ve since switched it back to what it was, but how did that happen and is there a proper email address to contact y’all about these types of technical difficulties?
Happened to me on the 8th and gave me cold sweats for a second, lol. I contacted Matt at his Autopian email when it happened: matt@theautopian.com
They are aware of the issue.
Accidental computer aided doxing is always fun
Good thing this site doesn’t require our SSNs for membership or we’d both be pretty well screwed.
I’m trying to figure out why this is suddenly happening.
I understand, this sort of this is always a PITA to solve, internet Gremlins are beyond my understanding, so all I can do is wish y’all the best of luck in your search.
It happened to me a few weeks ago. I’ve decided just to go with it.
Glad you mentioned. The last time this happened, my name seemed fine. This time it got me, though. Thank you.
Yeah, happened to me a week or so ago, I just edited my profile with the screen name in place of my real name to stop it
The same happened to me when I officially bought my membership – I think it was related to my CC payment info. I saw it on my next comment and changed my username back.
I noticed as well. I decided to just leave it and if it fixes itself then fine. If not, well I’ll be Nick here and CoolJetta3 everywhere else on the Internet.
Also happened to me, I momentarily freaked out, but in retrospect I have no idea why, haha.
Why would you give anybody on the internet your real name?
China has entered the chat.
Because China can undercut ANYBODY. Petty shit like tariffs won’t stop them, and the gougers who left the segment wide open will get what they deserve.
People can’t afford new cars anymore, stuck buying used.
Well, we can hope, can’t we? But, it seems like the Chinese automakers want to sell expensive vehicles to us as much as anyone (Polestar, Volvo, Buick), maybe one will decide to come in at the low end eventually, but there’s been a lot of false promises from BYD, Geely, Chery, and others over the years.
Run the cafe numbers in the US…build it big to avoid legislated fuel economy or build electric. it’s a shell game and YOU will all end up with electric leased vehicles that will drive themselves out of your laneway when you miss your $3000 payment to Elon
I think this will be the window Chinese automakers needed to enter the market. Just like the Koreans and the Japanese before that.
This x1000
It’s not a window anymore, it’s a double garage door
To me it was clear years ago when everyone else decided to go upmarket in search of quick profits that the Chinese will come and eat their market share from the bottom up.
there is always the bus…
Is there, though? I know of plenty of semi-rural areas in my state where the there is far more housing than jobs, but there is no transit service of any kind to the centers of employment. And you can’t just pick up and move to the centers of employment because housing is scarce and cost prohibitive, even more so than a cheap vehicle.
Then I guess a minimum guaranteed income is required as well.
Fuck the bus- would rather walk, even hitchhike
I like busses in theory but whenever I think of the bus I get Vietnam flashbacks to that one pic that went around where someone who was infested with bedbugs decided to take the bus and left a little settler party behind
God that still makes me nauseous to this day.
Bedbugs are brutal! Check this infestation out:
https://www.youtube.com/watch?v=6XlONPtcpO4
That music just makes it… *chef’s kiss*
No there isn’t.
Public transit infrastructure is total ass across most of North America, there are many places where there just straight up isn’t a bus. At all.
I am 100% in favor of public transportation… for other people.
hear, hear!
I like it for me, too, when it doesn’t suck. London Underground, NYC subway/rail, and DC metro are all fine ways to get around. SF’s system is.. usable but hit-or-miss. I hear Chicago’s is pretty good. The rest of the US generally has either a half-assed attempt or nothing at all.
Market forces will eventually return cheap cars to our market. Sure, it will take another five years, but it will happen.
I hate leases! Yes, they make sense in a lot of cases, but for someone like me who barely drives, they just never make sense. Instead I just eat mega depreciation. Sigh.
Yeah, anyone who leases is a complete & utter moron (they make sense in 0 cases)
Because lease payments for business use (or the respective portion thereof) are tax deductible, there are situations where leases do make sense. However, sans that scenario, I tend to agree.
On one hand, leasing would make me consider some cars (like BMW or Audi) that are probably great experiences when new and then I can ditch the car before the warranty expires.
But I’ve only owned Asian brands that have proven to be reliable, and at this point in my life it would feel strange to buy a car that didn’t come from Japan or South Korea.
Because, guess what? Cars don’t sell if people don’t want them. And people want giant SUVs because maybe then they have half a chance at seeing around the giant fucking pickups and other giant SUVs. Or surviving an accident.
Things have gotten so absolutely ridiculous that in a WK Jeep Grand Cherokee between two 2023 F150’s, all you get out your massive rear side windows is pickup bed. Granted, the WK is only a few inches longer than a Rav4 (no, seriously,) but it’s a LOT taller.
And with current interest rates? Buying anything like a Rio doesn’t make sense for anyone. I’m seeing interest rates for subprime that are literally illegal in any civilized country or state. You think 10% prime is bad? New, subprime, and sub-subprime are getting socked with over 27%, 30%, even 35% APR.
Which is exactly what I have said about VinFast and the entire VinGroup. The whole enterprise is based wholly on state-blessed accounting fraud, just like EverGrande. They know full well if any competent auditor looked at their books, they’d immediately ask to see the real books.
Everything about VinFast is basically a state-sponsored scam. Sure, they actually build things. And they have properties and grocery stores and hospitals. All of which are selling into a country of 100M with declining growth where the average household income is $277USD a month. Yet somehow the country is magically maintaining sub-2% unemployment and year after year of 7%+ growth in their GDP?
Yeah. We’ve seen the China ‘infinite growth, honest’ playbook before.
It’s none of these things. The market is, as a point of absolute fact, cyclical. Trends come, trends go. If you want to be the cool mom in the 80’s and 90’s, you had a minivan. In the 60’s and 70’s, you had the station wagon. Everyone screamed FWD performance cars were bullshit in the 80’s, they dominated the 90’s, back to RWD in the 00’s, and we’ve come back to FWD again.
The market is dead for now. I’m not going to attempt to prognosticate on when it will come back; only that it will. Otherwise continuing on this track will cause the mythical ‘infinitely expanding’ economy to implode catastrophically, or they’ll be forced to start paying people better. And you know damn well they’d gnaw off their own leg before they’d do the latter.
You mean, the Fox Rabbit model???
https://niko.roorda.nu/computer-programs/fox-rabbit-math-model/
This is a good one too…
https://www.geogebra.org/m/qks6rqgg
But people do want them. They don’t sell because the car companies don’t want cheap subcompacts to sell because profit margins are low. They’re not marketed and dealers will do everything they can to steer economy car buyers to more expensive S and CUVs.
Was gonna say the same. Sure sales are way down, but you know what else is way down? Inventory. The Rio is one of many cars that they don’t have on lots, like ever, and then lament the fact that they aren’t selling enough. It’s annoying.
When I bought my Ioniq, it was hidden out back by the service department, was the only one they had and the salesman told me they didn’t typically stock that model but would order them for customers, mine was a special order that the original buyer bailed on because it took too long to come in. He tried to upsell a Santa Fe, and I ended up having to leave and come back the next day because of some paperwork or system issue that prevented them from changing the car from sold to back in inventory to sell. And they still never bothered to remove all the plastic film from everything, was still peeling it off random places a year later.
This was for a 60mpg, sub-$30k car at a time when everyone was bitching about both high gas prices and high car prices. Really seemed like the dealer didn’t want to sell it and maybe wanted to barter with it with another dealer in trade for a Santa Cruz or something
The dealer system is harming literally everyone in this country, from nature to car buyers to car manufacturers to trade balance.
Car makers won’t return to lower cost and lower margin vehicles until they’re absolutely forced to by higher interest rates (even if historically low-ish, still higher than the last decade or so). As long as lenders have lax requirements and are willing to finance car notes up to a decade, the trend will continue for the foreseeable future.
“But people do want them.”
Based on what? Because you have absolutely nothing to support your argument. Nothing. I have years and years of sales data and demographics showing that Kia Rio buyers? Fewer and fewer every year, and by and large people who had no choice and were getting saddled with straight up predatory loans.
Literally nobody wanted a Kia Rio. They definitely didn’t want a Kia Rio that they had to pay $40,000 for.
But sure, let’s make bogus arguments using nonexistent data that you can’t support in any meaningful way.
And let’s just talk those numbers briefly, shall we?
82,211, 1999 – the Kia Rio’s best sales year. (Also it’s worst quality year.)
40,742, 2013 – the highest sales the Kia Rio has had in the past 10 years
16,760 – how many they sold in 2017, just before releasing the new one
22,975 – how many they sold in 2018 with the really quite handsome redesign
31,362 – how many they sold in 2021, their best year in ages, because they had inventory
$16,050-16,990 – the Kia Rio’s MSRP in 2021
Okay, got all that?
75,126 – how many Kia Souls they sold in 2021.
92,326 – how many Kia K5’s they sold in 2021. Yeah. Literally three times as many. (That used to be the Optima, a mid-size sedan.)
$17,590-27,650 – the Kia Soul’s MSRP
$23,590-25,500 – the Kia K5’s MSRP
In fact, the only things that sold worse than the Rio in Kia’s lineup? The Stinger and Sedona. They sold a whopping 13,517 Stingers and 14,625 Sedonas in 2021.
And why is that? Because gee, for a whole thousand bucks more, you can get a CUV (Soul) which gets offset by incentives. Or for a little more monthly, you can get the K5.
But that’s not even the real knife to the heart.
Nope. That’s the Kia Forte. In 2021, this compact sedan sold 113,051 units with an MSRP between $17,890 and $23,090, with frequent lease and incentive deals.
And unlike the Rio? The engine and transmission were adequate, and it came with automatic HVAC, alloy wheels, keyless entry, cruise control, AEB, lane keeping, automatic headlights, a decent infotainment system, and good cloth upholstery – all standard.
And guess what! At a $1000 down, 72 month, 13% because-fuck-you term? Your $16990 Rio is $318.98 a month, and with $1000 in incentives or $2000 for your trade, your $19,390 Forte LXS is $339.05 a month. That’s it. $20 more a month for a markedly better car.
I imagine the Soul or Forte have and will have greater incentives that would let you get out the door for the same price as a Rio. There’s no offers at all on Kia’s site for the Rio now, so seems like they’ve been planning to wind it down.
We talk about the used market too – for those shopping based on payments and/or bank approvals, a used Forte and Soul at least can strike the balance of actually depreciating and still having some factory warranty coverage left, which something like a Corolla or Civic are less likely to between their higher resales and shorter warranty terms.
A base Soul is like ~$3k more than the outgoing Rio, so yea, it wouldn’t take much for an incentive to close the price gap enough that even at a 36 month loan (oh who am I kidding, it’ll be like a 72 month loan) the cost difference likely isn’t insane for the monthly payment.
I know I’d pick the Soul in a heartbeat (I actually owned one for a few years and the base model w/ 6 speed manual transmission was a solid little car).
The writing was on the wall around 2007, when the second generation Mitsubishi Outlander was revealed and the term “crossover” as freshly minted. Auto journalists were quick to clarify the taxonomy of it and what it really meant. Initially, it was the decline of the minivan and, ostensibly, the station wagon. But now that segment has devoured virtually every chunk of market share that doesn’t start with “pickup” and end with “truck.”
When I read those early reviews, I knew there would be a loss of market share in the cynical pursuit of profits. Did I imagine it would reach this point? No, not at that time. Two or three years ago? Sure. But hindsight is 20/20 and all those other platitudes.
“Crossover” was certainly a common term by then, as it had popped up with the first wave of midsizers like the Buick Rendezvous at the turn of the decade, and I imagine it popped up even before then in the late 90s with the original Lexus RX and other smaller utes.
I think we tend to see it that way retrospectively, but because there was no true crossover outside of the immediate present tense, it couldn’t be retroactively applied to those models; not like we do today. It was really taking off in the mainstream Zeitgeist roughly around that time. I was reading a lot of the rags and online sites (Edmunds, Road & Track, Autoweek, Car & Driver, etc) and noticed it gradually creep into their parlance around that time, maybe 6 months prior.
I’d say it was certainly more casually used without the “what it is” explanation by ’07 and that’s when we started to see minivans get picked off, as Ford and GM leaned into crossovers more, so then there was more proof of the market shift. But the term itself was actively used in the new model intros and reviews for years at that point. Those links I included show it used in two separate C/D articles from 2001 & 2003 – here’s another from MT for the 2001 Tribute.
That’s fair. I suppose it’s possible I’m experiencing confirmation bias on my recollection. Although, it could probably be argued that either the AMC Eagle or XJ Cherokee were the true progenitor of that class. It’s kind of sad that two of my favorite vehicles led to the revolution that killed many other perfectly cromulent cars.
Agree with you there for sure, AMC definitely pioneered what we know now by several years no matter which automaker you consider kicked it off for the “modern era”- be it RAV4, Subaru, whomever.
Three years ago. Hindsight is 2020.
nice, lol
The people who will really miss the cheap new subcompact are the people who aren’t talking about cars. They’re the people who go to the car lot and look for something they can afford the payments on. They are going to either try to scrape together more money or buy a used car that is cheap enough to make up for the higher interest rate.
They’re a small part of the market, but they’ll feel it. They probably won’t talk too much about it because they aren’t the ones watching market trends. They’re the college kid who wants something reliable enough to drive cross-country or the person whose car just crapped out and they’d prefer to get something with a warranty.
They’ll adapt. Some of them will be close enough to work to use an e-bike or something. Some will get a used car. Some will tighten their belts in other ways. The shittiest part of this is that the subcompact economy car is going away at the same time interest rates are going up. That’s going to make it harder for the people who would buy them.
Some won’t adapt. In many parts of the U.S., access to a car is a necessity to function in society, because there are no viable alternatives available. Increasing numbers of people at the bottom are becoming destitute, and as transportation becomes more expensive, their numbers will undoubtedly increase.
That’s true. And the rising cost of a used car is certainly getting even more exacerbated by the interest rates, which will pummel the poorest among us, who will be forced to decide between something reliable or something they can afford payments on…and then a repair bill takes that away, too.
The people who bought sub compacts have also been marketed at for years that they should be buying a crossover/suv. Also lots of friends and family have gone the crossover route, so they will end up thinking thats what they want/need anyways. This is by design in auto industry, and has created the larger margins we keep hearing about.
Ford voted to strike? Will anyone notice? Given it’s awful quality problems, copious recalls, and inability to meet product demand, I didn’t think anyone was still working over there. Heck, look at the number of vehicles vanishing off of Ford’s storage lots, even the security staff is phoning it in.
Their products have gotten so complicated and feature-laden, that it is extremely difficult to build them with few flaws off the line. A sign of the times.
True enough, but those are problems of their own making. So much of what is passed off as features are neither necessary or required for functional transportation.
having been burned by leases, hard to do one again.
“The worry here is that retail investors might buy VinFast shares in the mistaken belief that the stock price reflects the collective market judgment”
This joke just writes itself. So where do I find this collective market judgment? Reddit?
I potentially see the VinFast/Group founder & owner becoming the next gen EM d-bag, maybe just of Asia who knows.
UAW should just strike now, its inevitable, going to be a disaster, and I can’t decide who will win or if they deserve it. Who cares though as I would never buy a car from any of the big 3 brands… we’ll except a Ferrari and it doesn’t count cause not UAW made.
Leasing an EV being a great choice…. story is like 6yrs or more late to the party. Its always been a smart move, never heard of the Volt/Bolt $99 lease deals, or I think Fiat 500e could be had for $49/month. BMW lost massively on my i3 leases, they even PAID me to trade in my old one and get a new one for a lower payment. This was pre-covid and my old one with a residual of $30k netted them maybe $12k at auction.
The death of the small, cheap car is a reflection that the working class who used to be able to afford them, no longer can. The bottom 80% is mostly priced out of the new car market. This is also a reflection of an industry that wants nothing available on the market but high-margin items, and of which spent billions of dollar convincing people they need much more car than they actually use. This is going to blow up in their faces spectacularly when the next energy crisis hits or if the economy completely collapses, because almost no one is going to be able to afford to purchase outright or get the loan for the expensive SUVs/CUVs/trucks that are now ubiquitous, or keep the ones they have operational, the consequence of which may be leaving the entire U.S. auto market open for the Chinese companies to take it over while dealership lots end up clogged with unsold products.
I think Tesla will be fine in this scenario(though not unscathed), but Ford and GM and Stellantis, not so much. Tesla could at least adapt because they have shown a willingness to do so.
Should this come to fruition, expect another round of taxpayer-funded bailouts and stricter regulations to protect the established industry under the guise of saving jobs that will end up automated out of existence anyway.
The emotion of buying a car for me changed from “That looks really nice, I’d love to own one of those.” to “How are they going to try and screw me over with subscription nonsense now?” Like, I’m have a hard time understanding how the OEMs expect to keep being misers and making the line go up. Apparently, there are a lot out there who are more well off than me and are comfortable owning less and less of their products.
The Vinfast thing to me reeks of illegal activity. Like makes Oceans 11 look like a candy store robbery level of fraud. But I don’t dabble in financial matters that complex, so what do I know.
We’ve given people the choice of some increasingly good cheap cars, and they largely would rather buy a slightly used, slightly bigger car (I bought my subcompact new, but I’m at 9 years of ownership with no imminent replacement plans, so I’m not really driving the new car market). As long as subcompacts remain in production in *some* market, manufacturers should be able to pivot and bring those over if there is suddenly a spike in demand, but that seems unlikely without a simultaneous spike in interest rates, gas prices, and catastrophic reliability issues.
I’d like to see subcompact sports cars be a thing again. Everything has gotten so-damned big. Even the new Z is getting close to two tons.
Every now and then I see a Ford Probe GT on my way to work and think to myself: this guy has one of the best commutes of the day, as I would much rather be driving that then my family hauler. Yes to more subcompact sports cars.
This one.
It bears repeating once again that if consumers demanded these cars, automakers would supply them. Look at the sales charts for every single discontinued subcompact; you won’t find many that were rising or even steady when they were discontinued.
It’s a rare person who actively seeks a subcompact out; most people who end with one are settling. And with used cars being better than ever in features, expected lifespan, and fuel economy, there’s less and less reason to settle.
I don’t believe it all the consumers fault for not asking for them, the auto makers has been marketing bigger and more expensive items, so that’s what people recognize and ask for. Just like GM killed the EV, most automakers are choosing to kill the small cars and replace with higher margin small crossovers.
If the customer discovers via marketing something that they would rather buy, they own it in happiness, and the automaker makes more money as a result, who exactly is being hurt?
And if the consumer is not happy with the larger choice, they wouldn’t keep buying them. But they do.
American car buyers have equated large size with desirability and luxury for more than 100 years. So if it’s all marketing, you have to admit it’s one of the best campaigns of all time.
The consumer goes to the lot and only sees what the dealer wants them to see which is crossovers, pickups, and SUVs. And when was the last time you saw an ad for a cheap subcompact? It’s the manufacturers that killed the cheap, new car. Not the consumer. There’s enough of a market for them to survive. And with the used car market being what it is, they really should survive.
I will repeat my question from the previous post.
And I will question why subcompact sales are down so significantly from 2011-15 when presumably dealer and manufacturer motivations and marketing have not changed? Note that this decline far precedes covid shortages.
Who precisely are the people that both demand subcompacts but are so easily swayed by dealers hiding them in the back lot that they buy something else they don’t really want anyways? The very idea is goofy. There is not a hidden population of small car buyers, that is wishful thinking on the part of weirdos in comment sections.
I’d say that while it’s not wrong that you can’t buy what you can’t find, it’s more true that most buyers of the cheap small cars are not really actively seeking out the specific form factor. They need low payments or they need something they can get approved on or just to get out of the current car they’re stuck in – upside down or just a money pit – or some combination thereof. And sometimes the car that achieves that isn’t the smallest one or the cheapest MSRP. Too many other factors in margins and incentives and the like.
Dealer and manufacturer motivations and marketing have absolutely changed. There is no longer a car for every budget/create brand loyalty mentality. It’s all about the highest profits right now. I’ve seen people walk onto a lot to buy a small car and driven away in an SUV. It happens all the time. It’s not goofy nor wishful thinking. I’ve always driven small cars. And I’ve had plenty of folks lament to me the demise of the small car in America. People like small cars. Many of them have just been brainwashed into thinking they need big cars and now we’re in a pointless arms race.
I remain astounded by the numerous people here who seem to believe that automakers’ profit motivation was somehow different in the past, or that Americans liked rather than settled for small cars once upon a time.
Look at the average size of cars in the 60s and 70s for gods sake. Big has been in for a very very long time.
Sure there’s always weirdos or urban dwellers that want something small. But that market is not large, has never been large, and isn’t sustainable when hybrids and high quality used cars remove the motivation to buy a subcompact for its low price and/or fuel economy.
I bought a Fiesta new in 2017. It had sat out in front of the dealership with nary a test drive for 6 months, and it was sold to me for half its MSRP. That is not the sign of a healthy market for small cars, and sales have only declined further since.
“American car
buyersSellers have equated large size with desirability and luxury for more than 100 years.” FTFYThis is just not right at all.
Name a premium small car that’s sold well. Maybe you could argue the Mini, although it’s not selling well now.
Meanwhile the list of attempts that have flopped is long. The car makers have tried. People don’t buy them.
Excepting a gas crisis, American buyers have always always always prioritized size over pretty much everything else.
By going premium you’ve changed the direction of the conversation, but I will present you the Honda Fit instead. The last gen of the US model stopped production in 2020, so anyone that would have been happy with the cheapest Honda available now has to spend more. Yes sales were going down on the fit, but that was because it was a 7 year old model, and many people want something new and exciting, not something they’ve seen for nearly a decade. No more Fits available, so customers are sold HR’Vs. Much of this is by design from automakers, they kept stock levels low on low margin cars, and we are seeing this exaggerated even more now in the fact you cannot get a base models on more expensive cars anymore. The manufacturer and money lender are not your friends, they don’t care if you can’t buy what you want, because you will end buying something more expensive because its what they have.
The purpose of asking about premium cars was because you seemed to dispute my assertion (not very controversial I thought) that American buyers equate large size with luxury and desirability.
For that not to be true, there would need to be examples of a small car being desirable to the masses on its own merits, not just as a fallback.
The fact that Honda is successfully selling former Fit buyers an HR-V instead is evidence to me that most people didn’t really want what the Fit offered over an HR-V. To my knowledge, there isn’t a large, outraged group of HR-V owners bemoaning the lack of choices and wishing they had been able to buy a Fit instead. If that were true, they would likely be flocking to Rios, Mirages, and Versas as the closest alternative available. But we can see from the sales numbers that they aren’t.
I simply don’t accept the premise that small car inventories have been artificially restrained for a decade now (sales declines started way before covid) or that marketing tactics have drastically changed. Why would automakers build a product at all that they wanted to fail? No, the reason small car inventories are low is because there are no buyers for them.
I’ll let you have this one today, but I see it as the reason small call inventories are low is because manufacturers don’t want to spend money marketing and competing for low margins, so they have forced people to spend more on larger vehicles they tell you equate to success. Good back and forth today, I’ve enjoyed it.
Perhaps this is an opportunity for another Autopian research project like the the Trimflation article. I’d love to see actual data showing how we got to the point where cheap/small cars aren’t a thing anymore. Was it just excellent marketing? Production manipulation by the auto companies? Consumers making different choice? Or, some combination.
Trying to do that with real data in an unbiased fashion would probably very hard – ie. proving it with math. Maybe even impossible. It would be interesting.
I too would read this, and while I have my own opinions on the reasons, I’d like to see them backed up with more data than I have access to, if it exists somewhere.
My belief is that it doesn’t cost much more to make a larger car which can be sold for a higher price at a higher margin. So there’s little incentive to sell a lower-margin car whose manufacturing cost isn’t much lower.
Honda tried to improve the margins on US-bound Fits by moving assembly from Japan to Mexico for the 2015 model and the first year of production was very problematic in terms of QA and logistics, and the move probably cost Honda more than it saved.
I’d love to see an Autopian article on what typical component costs are vs. retail car price. I’ll bet a company like Munro could provide some high-level percentages without violating NDAs.
I used to work with someone who’d been in Operations at Ford and he told me that a 1993 Lincoln Town Car that sold new for $35-38K had $500 (Ford’s cost) of sheet metal in the car. If that’s the case, smaller cars probably aren’t significantly cheaper at the raw material level.
This is exactly it. They likely cost even more money than the larger cars to produce for their price point in some ways as it takes more resources to design them to pass crash testing. Other testing and certification for extreme climates, emissions, and everything else isn’t going to be much different in cost and might even be more with the greater need to reduce costs to meet a set price (hence why you see a lot of torsion beams, for instance). On top of that, they just don’t sell in the volumes of the more profitable cars. This isn’t a new phenomenon, either. Go back before the CUV plague and compacts would outsell subcompacts because they were just better deals than subs with (relatively) larger and more powerful, less stressed engines, more room, better chassis design, interiors, features, ride, and resale all for a small mileage penalty and not much more money (in some cases, a base compact’s standard equipment would about match the optional stuff in the sub so that the prices would be the same for those similarly equipped vehicles). And they weren’t much bigger externally, so they were still easy to maneuver and park. Even for small car fans like myself, the compact was always more appealing. They usually even looked better!
Volkswagen traditionally has had success selling small cars to Americans who could afford something bigger and more expensive. There are ways to market small to Americans and make it hip.
Even when the Fit was a going concern, it was not easy to find them and there was -zero- marketing from Honda or the dealers themselves, other than a half-hearted effort when the second-gen made way for the third-gen. I loved my Fit, but it was a PITA to find a dealer than had more than one or two of them in stock, even in Nothern California where I had my pick of like eight dealerships within easy driving range.
If they’d have made an Si version of the Fit that actually got out of its own way and publicized it properly, I truly believe sales would have been much, much better.
It would be interesting to see what the actual transaction prices were, because I imagine it was easy to get a Civic and Fit for about the same price out the door, and I think people just wanting the cheapest Honda are going to go Civic anyway. The Fit (and Yaris, for Toyota) were some of the first to go because the gap was pretty narrow against the next class up.
The MSRP gap between the Fit and the Civic was less than $3k, but, the margin between MSRP and invoice on a Fit was around $400-500, while a Civic was about $1600. Couple that with the likelihood of more incentives on the Civic – they built more and are going to do more to move that metal.
Would they have sold more Fits if they built more, probably, but with such a small margin I get why they wouldn’t and it’s not like we were a primary market for the Fit, whereas the Civic is a top 10 best-seller. From the consumer standpoint – if you’re in a Honda showroom, you’re looking for cheap efficient transportation, and the Civic was bigger and more powerful with nearly the same fuel economy, the Fit got maybe 10% better comparing base 2020 LX CVT models and the base Civic wasn’t even the most efficient engine. And the new Civic basically narrowed the gap.
Now, the HR-V is within $200 of the Civic, and the invoice/MSRP gap is about the same. But then the North American HR-V here is basically a tall Civic hatch, not really a subcompact SUV.
There are many, many things which consumers demand but manufacturers do not supply. Exhibit A: small(ish) trucks like the Ford Maverick.
Like most things that exist outside a frictionless vacuum, the market isn’t nearly as efficient as it theoretically could be.
Yeah, they were mostly junk that were a worse deal than the next step up. They were not much cheaper, not much better on paper for mileage (maybe worse with the more strained drivetrain unless driven by someone who bought it as their last car), had worse quality interiors, cheesier chassis, worse ride, more tiring on long journeys, and had generally less robust drivetrains with very obvious deficiencies in power because, while the cars and engines were smaller, they weren’t correspondingly light enough since the floor for weight on a modern car just isn’t that low and certainly not for an already paper-thin profit margin car. Then there’s the psychological feeling a lot of people would have driving such a small, tinny car surrounded by distracted land dreadnoughts. Resale also tended to be worse, so there really wasn’t a compelling reason to buy.
I mourn the loss of the cheap NEW shitbox. They’ve served me and my family very well over the years. But the new SUV version of the cheap NEW shitbox doesn’t seem that different to me, just a little more expensive.
And I would argue that an SUV version is a bit more useful than the exiting sedans. They’re only about as useful as a cargo box hatchback, but better than the sedans that are exiting.
If we’re going to be stuck in a small car in a world of “Bro-dozer” oversized trucks that come huge and tall from the factory, it does take a vehicle with a higher beltline to feel remotely survivable in the daily commute.
It’s the light truck carve-outs in Federal regulations that have caused this. I wish we could turn back the clock and fix this shit.