Jerry Flint

Jerry Flint

3/03/2009 @ 6:00AM

Do Americans Really Want Small Cars?

Smaller cars are coming–we all know that. Domestic and foreign manufacturers are about to start a wave, pushed by expected higher fuel economy requirements. These smaller autos will crowd out new versions of the larger cars we have been buying. Automakers don’t have the wherewithall to build everything.

If your main concern is global warming or oil imports, this is good news. But here’s the problem: Americans have not had a love affair with smaller cars. As a rule they are less comfortable, less safe and less useful–carrying fewer passengers and a smaller load.

The danger here is that our auto sales could stay smaller for another decade if owners hang on to their old SUVs and Big Boy V8s, if they don’t like what the greens and government people say they should be buying.

The not-so-easy trick in small cars is making money off them. There are two ways. One is to make them expensive, like $30,000. But Americans think small cars mean cheap cars. Audi has a new small A1 for Europe but isn’t bringing it here, because at current exchange rates it would cost $25,000. Dealers say it’s too much: Small still means cheap.

The second way is to sell lots of them. Ford Motor , Volkswagen , Toyota and Honda all got their start with small cars and got rich at it. But the smallest cars, like the Honda Fit, Toyota Yaris and VW Rabbit, are made in high volume in foreign factories, and a few thousand are shipped here.

A company needs annual production of 150,000-300,000 vehicles, a full factory’s worth, to be profitable. Ford will try to build its small car in Mexico. We’ll have to see if they can sell enough to make a dollar.

But remember, small-car volume is fairly small.

Last year, Toyota sold 102,000 Yaris models, Honda sold 80,000 Fits and BMW sold 54,000 Minis. That’s out of 13 million total sales in the U.S. There’s no way those cars could be produced here profitably at those numbers. And the small cars–and there are others besides those named–got a boost when gasoline prices soared past $4 a gallon. But most fell back with fuel prices.

Meanwhile, it’s a good idea to remember how well the big stuff sold: Ford’s F series pickups sold 516,000 last year; Chevy Tahoe SUVs, 92,000; and Toyota Highlander SUVs, 105,000 (higher than the Yaris sales). Big car sales were down, but they were still ahead of the small cars.

Now, just a bit of history. At the end of World War II, both General Motors and Ford planned to build small cars, but they discovered they could build a bigger car for about the same money, so they killed the projects. After a terrible sales collapse in 1958 and an intellectual rebellion against big cars (much like today), Detroit created the smaller 1960 Ford’s Falcon (400,000 sales a year), Chevy designed the Corvair and Plymouth the Valiant. But they faded as times got better.

In the ’70s, there was another wave: the Ford Pinto, the Chevy Vega, the American Motors Gremlin. But they faded away, too.

Even the famous Volkswagen Beetle faded, and the small Japanese cars were failing when an oil crisis revived them. In a nutshell, we’ve had smaller cars become successful for a while here, often in bad times, but their sales always fell back. Plus they seem to grow bigger every year, like the Honda Civic.

Now let’s take a look at some of what’s coming:

Nissan Cube, a box-like car like the Toyota Scion xB. On sale in May, starting price from $13,990 up to $19,370, lots of options, even shag carpeting. It’s cute-ugly and could be a hit.

Toyota’s new Prius comes in March with more horsepower and more miles per gallon. A plug-in version will get tested here by year end, too. A small model like the Smart, called IQ, may come here one day.

Honda’s new small Fit is on sale now, and the new hybrid Insight is on the way this spring.

Kia has another cute-ugly box called the Soul, coming this spring. Kia will also replace its small Spectra with a new model called Forte in June.

Volkswagen may bring its small Polo car to the U.S.

What about Detroit? GM will offer a new high-mpg car, made in Ohio, called the Cruze, early next year. Later, the small hybrid electric Chevy Volt, plus a tiny Korean-built car, are coming. Ford has a new small car, the Fiesta, its smallest car here, on sale next year. There’s a new Focus coming, and an electric car is promised. Chrysler says it will have an electric roadster next year and lots of little Fiat -type cars later, if the Fiat deal goes through.

That’s just a sampling. There are more. Now if only there are enough buyers. You know the old line: What if they gave a war, and nobody came?

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