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Throughout The Car Industry



Small Car Sales To Grow By 30 Percent

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On: Wed, Apr 27, 2011 at 3:11PM | By: Chris Weiss


Small Car Sales To Grow By 30 Percent

For years, the major trend in the industry was "go big." Even tiny, petite drivers with no passengers were adopting massive, boxy SUVs at an alarming rate. It was quite fashionable to be able to fit surfboards, bikes, boats, and other equipment inside your cabin, even if you didn't have the slightest intention of doing so.

Then something happened: reality. Gas prices went on a never-ending, uphill journey and people slowly realized that they really didn't need to drive massive refrigerators-on-wheels. Truth be told, they could get by with much smaller cars, particularly when it meant saving significant money on the horrifying cost of gas.

With gas costs moving toward record levels, a surge is expected to hit the small car segment during the rest of the year and perhaps beyond. Mini USA chief Jim McDowell made a prediction from the floor of the New York Auto Show that I'm sure he hopes is self-fulfilling: Small car sales will increase by some 30 percent in the United States.

McDowell didn't appear to quote a time frame for this figure, making it more of a safe prediction than anything, but Reuters reports that the growth is already happening in a real way. Last month, small cars made up 36.4 percent of the market. In 2010, small cars made up only about 33 percent. With gas prices nearing the $4 per gallon mark, and no signs that they'll let up, small cars should continue to experience sales growth in the months to come.

In anticipation of the growing segment, automakers like Mini, parent company BMW, and Volkswagen are expanding their small car offerings with a focus not only on size and fuel economy but also on more traditional factors like styling and options.

The industry is trying to avoid a repeat of the small-car spike of 2008. Like this year, gas prices were on the rise during the first half of the year. In July 2008, in fact, gas prices hit an all-time-high nationwide average of more than $4 per gallon. Consumers responded by purchasing smaller, more efficient cars. The strategy was effective for battling the gas prices, but once those prices started to settle back down to earth, consumers realized that they were left with cheap, uncomfortable small cars that lacked the comforts, performance, and style of larger, more premium vehicles.

By building small cars focused on style, comfort, and features, automakers hope to avoid the buyer remorse of 2008 and supply the market with cars that are not only efficient but also attractive and performance-oriented.




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