What do Toyota, Nissan and Honda all have in common? (Besides the fact that they are all Japanese automakers, that is?) They all re-entered the subcompact market in 2006 after abandoning it years ago. What's more, Mazda is planning to bring its subcompact Mazda2 to U.S. shores next year, Suzuki has signaled its intent to enter the B-segment with its popular Swift hatchback, and the domestics are in the game with the Chevrolet Aveo and forthcoming Ford Fiesta.

So, where does that leave Subaru? After all, the company has roots in small cars, starting with its first automobile, the downright minuscule 360, all the way up to the off-the-wall, four-wheel drive, three-cylinder Justy and its unconventional CVT.

Subaru spokesman Michael McHale tells Wards Auto, "The thing with the B-sector is you have to ask how you make money at the lower levels. You look at the pricing on the B segment – it's a tough segment to make money." Indeed it is – with base models of some competitors starting just under $10,000, profits are in very short supply.

For an automaker as small as Subaru, taking a risk on what is likely to be an unprofitable model generally isn't a smart idea. In other words, don't hold your breath for another subcompact Subaru any time soon.

[Source: Wards Auto]

Share This Photo X