Small is Beautiful

Will American motorists end their love affair with large and embrace downsized luxe? A number of carmakers are betting that they will.

Paul A. Eisenstein
From the Print Edition:
David Caruso, Jan/Feb 2007

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It's far more difficult in the highly competitive mainstream automotive market, where most of the new minicars are targeted. Even so, there's a flood of new product available. Honda has slotted its new Fit below its perennially popular Civic. Toyota has introduced the Yaris, which comes in a variety of body styles, starting at less than $12,000. And Nissan has weighed in with the Versa hatchback. "There must be something there," says Brad Bradshaw, Nissan's senior vice president of sales and marketing, "because everyone is going there."

Japanese automakers have been most aggressive in the so-called B-Car segment. (Automobiles are segmented by size, with a C designation referring to the typical U.S. subcompact.) But the Big Three are getting active. Chevrolet, the "value" division of General Motors, has launched the Aveo. To hold down costs, Chevy turned to South Korea, where the various Aveo models are produced by what was once known as Daewoo, now a GM subsidiary.

Late last winter at the Geneva Motor Show, the Chrysler side of DaimlerChrysler unveiled what could be its own minicar entry. Acknowledging Chrysler's late arrival to the party, senior vice president of design Trevor Creed stressed that the company can't bring out "just another B" car, so it is looking for a design that blends style "with European space and sensibility." The Dodge Hornet, which might best be described as a tall hatchback, sports a design that minimizes the car's footprint while increasing room for passengers and cargo. "Will we make such a product?" asks Chrysler Group CEO Tom LaSorda. "We just might," he says, answering his own question, though he stressed that the U.S.-based automaker will probably not build a production version of the Hornet itself. It is considering a variety of other sourcing options, including the idea of finding a Chinese partner.

As for Ford, the striking Reflex concept vehicle revealed at the North American International Auto Show in Detroit last year could be an indication of what's to come. With its sleek and sporty shape, set off by a pair of gull-wing doors, Reflex is anything but your typical econobox. Under the hood, a diesel-electric power train provides a reasonably quick and fuel-efficient ride, getting an estimated 65 miles a gallon in city driving and accelerating from 0 to 60 in less than seven seconds.

Ford president Fields is aware of the pitfalls of producing little cars. "We're not in the business to lose money," he says, a reference to the fact that Ford's old base model, the Escort, typically went into the red on every sale—a problem shared by many other small-car manufacturers. But looking at the growing competition, Ford can no longer sit on the sidelines. The struggling No. 2 carmaker is expected to put several of its own B-Car models into production for the U.S. market by 2009. To hold down costs, Ford's European operations will head up the design and engineering work, since small cars are already well established across the Atlantic.

Of course, if gasoline prices continue to fall as they did during the waning months of 2006, some of the steam could be taken out of the small-car market. But fuel prices alone aren't likely to determine the segment's long-term success or failure. American buyers aren't abandoning big cars and bigger trucks—not entirely. But the downsizing trend seems to be taking hold for a variety of social, political and economic reasons. It's only a question of time until everyone agrees that "small is beautiful."

Paul A. Eisenstein, a Cigar Aficionado contributing editor, also publishes the Internet magazine www.TheCarConnection.com.

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