SEMA says subcompacts sales are flying high
In the first quarter of 2006, there were 53,328 subcompacts sold. In the first quarter of this year, 107,942 little engines that could have tootled off of dealer lots. That's a 95.1% increase. At the current pace, according to Ward's Auto, B-segment vehicles will nearly double their last year's sales of 274,272 units. That would put them at levels not seen since 1995.
Until recently, sales of subcompacts consistently declined. In 1998, 120,216 only of them were sold, which was a 26-year low, and a huge drop from the 567,210 cars sold just three years prior to that. It's a small market compared to other segments, but it's a noteworthy trend because of the multitude of factors that could be driving it. A Global Insight analyst said that "auto makers missed the ball when they aimed the latest crop of B-cars at the youth market," because Gen Y would rather have trucks or SUVs. (Has anyone told Scion or Honda that?) But if that's the case, who's buying them and why?
[Source: Sema via Winding Road]
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Reader Comments (Page 1 of 2)
Yaroukh 8:45AM (6/02/2007)
And what is it that FoMoCo has to catch up with this wave?
(:o[
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ne1butu 9:35AM (6/02/2007)
This is probably due to the reality that there are just a lot more appealing cars in the subcompact category rather than a real change in consumer thinking. The increase is still just a drop in the bucket compared to total vehicle sales.
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gsolman6 12:38AM (6/04/2007)
ne1butu: Actually I think it was the change in consumer thinking that prodded the majors to bring over cars that they had been selling in Japan and Europe for years but were previously thought to be a hard sell here.
chuck goolsbee 10:18AM (6/02/2007)
NEWS FLASH! have you checked the price of gasoline lately? Have you seen the MPG averages of SUVs and Trucks? The only surprise here is that this trend didn't happen 3+ years ago.
The SUV is dead folks. The 3% of owners who actually take them off-road will still buy one in the future, but the days of $1 gasoline are gone, so therefore the days of the fuel-hungry, single passenger Commuter Truck or Grocery Getting SUV are gone too.
The marketers of the Big 3 have missed the chance and this very well could also spell their doom. Once the Japanese and Europeans, or god help them the Chinese, start selling highly-efficient compact Diesels on our shores these numbers above will look miniscule.
What does Ford or GM have to compete in this market?
--chuck
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Barney 11:45AM (6/02/2007)
"The only surprise here is that this trend didn't happen 3+ years ago."
The trend happened over twenty years ago. History repeats itself. The big V8s of the seventies died and was replaced by small 4 cylinder cars. Then the demand was for bigger cars and more horsepower, again. Now a demand for small fuel efficient cars.
darkNIGHTS 10:48AM (6/02/2007)
Good. Let the SUVs suffer.
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Ben K. 10:49AM (6/02/2007)
GM needs to build the three mini cars recently shown in New York. The Saturn Ion will be replaced by the Opel Astra. The Chevy Aveo(shown), Cobalt, HHR and Pontiac G5 are the only smaller models GM offers. The trend will shift slowly, by the time GM can prepare for production of these cars, they will be needed. The Beat, Groove and Traxx were very popular on blogging sites. Not to mention the other GM alternatives, like the Volt and Sequel.
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the law 11:08AM (6/02/2007)
Ok GM has many small cars including small diesels.They just need to get on the ball,meet the regs. and bring them over.
Opel has become a untapped resource for GM.Just look at the current growth of Saturn.
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bmoredlj 11:39AM (6/02/2007)
We all know old people like Buicks and Toyotas. But I don't think there's any one type of vehicle youths prefer over another - they're too diverse a group. If you're of the mind that youths tend to have less money, then it stands to reason they'll probably buy the cheapest new car available - a subcompact. Well over half of the Aveos, Accents, Versas, Yarises, etc. that I've seen are driven by people in their forties or older - low-income people who want the reliability and newness of a new car but don't want to spend a lot of money. Broke-ness stretches across all age groups.
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Barney 11:49AM (6/02/2007)
"Broke-ness stretches across all age groups"
I don't think that is the only factor. People today are more practical. They want a car that is easy to park, drive and maintain. The need for speed has been replaced by gadgets.
Mark 12:54PM (6/02/2007)
Come on Ford. Where's that new Fiesta. Mazda already has the Demio. How long can it take to put out a Fiesta...
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Al Thums 12:59PM (6/02/2007)
I hate to be the latest DJ to spin this broken record, but Ford has plenty to compete in this segment in Europe. At least they have wised up enough to bring the next generation Fiesta/Mazda2. I realize they can't snap their fingers and make it happen, but it is a sign of hope.
PS - This is a little off-topic, but how about that Duratorq turbodiesel in a NEW freaking Ranger? I get 20 mpg in my '93 even after 160k miles, but that combination could convince me to make a trailer out of it.
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Bob-omb 1:49PM (6/02/2007)
Yes, gas prices are insane and that's a big part of this, but another big part of this is how many more excellent subcompact cars are on the market within the past 36 months: The Fit, the Versa, and the Accent/Rio, which are vastly improved. Naturally it's still those crappy Aveos that are bringing the whole segment down, but what are ya gonna do.
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EnviroBob 4:47PM (6/02/2007)
SUV's and trucks are dead and yet GMC was up 8.6% last month. The trendy truck and SUV buyer is leaving the market, the core consumer for those vehicles will not. Sub-compacts are fine for those who do not have children to haul around.
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Desiri 5:45PM (6/02/2007)
The GMC Envoy and Yukon were down 36% and 12%.
GMC sales overall were up due to their new Acadia crossover/minivan.
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far jr 9:20PM (6/02/2007)
Why do you show a picture of the Aveo? Along with the underperforming Honda Fit, it lost sales in this segment compared to last year. Yaris and Versa (the newcomers) are selling almost double what the Fit and Aveo are selling. Where is that Saturn "Corsa" GM?
ne1butu... I agree with your statement about additions to the segment. Fuel economy on most of these cars is not much better than a Corolla or Civic.
Desiri... Almost all 4x4 SUV sales are down now as people re-evaluate if they actually "need" to drive one. It is not only a problem for the domestics who are actually faring better than many imports.
Toyota FJ Cruiser...down 33.1 percent
Nissan X-terra...down 29.4 percent
Toyota 4-runner...down 25.3 percent
Honda Pilot...down 24.2 percent
Nissan Pathfinder...down 18.2 percent
Chevy Trailblazer...down 25.4 percent
Ford Explorer...down 17.3 percent
Chevy Tahoe...down 4.4 percent
Toyota sequoia...down 26.5 percent
Toyota Land cruiser... down 23.3 percent
The Pilot is more of a CUV like Acadia and Edge, but is likely loosing sales because of these two competitors than fuel prices alone.
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Andrew 9:48PM (6/02/2007)
envirobob says:
"The trendy truck and SUV buyer is leaving the market, the core consumer for those vehicles will not. Sub-compacts are fine for those who do not have children to haul around."
I see this reasoning quite often and don't understand it. The choice does not have to be subcompact or "big iron" (huge truck or SUV).
O.K. a subcompact is not good for kids, but why not a station wagon, minivan, or sedan? Minivans cost less, get better fuel economy, and are as safe or safer than the "big iron".
SUV's are not dead but are declining. Gas prices look to be steadily increasing. Millions of people will still buy the big iron even with 3 dollar gas, but what about 4 dollar, 5 dollar gas?
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EnviroBob 12:20AM (6/03/2007)
Andrew,
I wasn't saying you have to buy an SUV if you have kids, I was saying that sub-compacts are great for those who don't need the passenger (or cargo) space. There's a reason the best selling cars for the past three decades have been mid-size models. Gas mileage is great, but if the vehicle isn't functional, people will buy something else.
Minivans aren't that great on gas, either. My previous (leased) vehicle was an Escalade and when driven conservatively (repeat conservatively), returned 16 around town and 21 Hwy. A Dodge Caravan is rated 16 and 23 for '08. Much bigger vehicle, not a lot of difference in mileage.
The thing to keep in mind in all of this nonsense is driving style. A person who drives an SUV conservatively will get mileage that is not that much different than a full size car or minivan. If you're hard on the gas and then the brakes in a Yaris, you're not going to get the 29 city MPG the EPA says to expect. if you drive smart, you can get the functionality you need at the same operating expense of smaller vehicle.
The other thing to keep in mind, people who can afford a $40,000+ chunk of big iron aren't all that worried about the extra $1,000 a year gas may cost (15k miles per year, 15 MPG, $1.00 more per gal). It's all relative. Nobody likes to pay $3.50 a gallon, but then again I paid the equivalent of $3.22 a gallon in '81 and I survived then, too.
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Richard 4:44AM (6/03/2007)
The market might be turning due to the higher gas prices but it will continue to accelerate due to other factors.
Think if you are in the market for a new car you take many things into consideration including, size, resale, quality, style and now gas prices.
Like it was said above people who buy a $40,000 SUV don’t really care about an extra $1,000 in gas a year BUT when you consider in 3 years that $40k SUV won’t be worth much as a trade in the cost is considerable more say $20k? Basically buying a large SUV is financially irresponsible even for people who can afford it.
Also sub-compacts are fine if you only have one or two kids, I know many people who do it with no problems and all of them could afford a larger car but decided they didn’t need it.
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Calguy 11:35AM (6/03/2007)
I think this is hugely because gas prices are sky high, but you also can't ignore the gross indulgence of buying an old-fashioned, cheesy gas guzzler during..
a ---big--long---deadly---war. There are some psychodynamics involved with treating yourself to a excessive vehicle for your needs when thousands are at war, seeing real sacrifice.
Buying a modern small car is *hardly* a compromise these days. AC, power locks, steering, windows, nav systems, small turbos, leather, tremendous safety etc.. it's a very good time to buy less ...and enjoy it more.
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