It’s been a while since the subcompact car market has attracted so much attention in

North America. Our friends in Europe have always known the virtues of small cars.

But here in North America, SUVs have dominated the parking lots at local Pier 1 for

more than a decade. However, as current gas prices advance slowly and into the future

prices that seem uncertain (and by uncertain I mean that they will undoubtedly be

higher than today) more people are buying small, fuel-efficient cars. We have seen a

a lot of activity in the segment recently. Toyota has introduced the Yaris, Hyundai has

significantly overhauled the Accent, Kia has updated the Rio, Honda just introduced

the Fit, and Nissan will introduce the Versa in May this year. And let’s not forget

Scion with the xA and xB.

Having a car in the subcompact market makes sense for a variety of reasons. First,

introduces the brand to new young buyers. If their experience is good, they will stay

with the brand as they grow and move to a larger vehicle. Toyota, Honda,

Hyundai, Kia, Nissan, Volkswagen, Mazda and others started in the sub-

compact car market. Second, it provides a safety net during economic downturns.

If gasoline prices rise unexpectedly, your knee-jerk reaction is to get a small amount of fuel.

efficient vehicle. And these cars are fuel efficient. The new Honda Fit for example,

it gets an estimated 33 mpg in the city, 38 mpg on the highway.

But these are not one-show ponies. Beyond fuel efficiency, they offer respectable

performance. The Toyota Yaris has 106 horsepower, which may not seem like

a lot, but tipping the scales at just 2315 pounds it has a close power-to-weight ratio

to that of the 220 horsepower Hummer H3. And these cars can carry almost

anything. With the rear seats up, the Honda Fit can swallow 21.3 cubic feet of ride.

By comparison, a Ford Crown Victoria can hold 20.6 cubic feet of cargo in the

trunk.

Households haven’t invested much in this class recently, if they ever have. Chevrolet

Aveo is essentially a renowned Daewoo and does not offer the level of refinement as

others. The Ford Focus is bigger and more expensive, like the new one from ’06

Dodge Caliber. But with the uncertainty of gas prices and increasing competition in

the segment, GM, Ford and DaimlerChrysler would do well to offer competitive

offer in this segment and introduce first-time buyers to their respective brands.

For most manufacturers, having competitive subcompact cars has increased the

business and built brand loyalty, something the people of Detroit have been trying

do for a while now.