Analysts believe that the return of small cars is not an accident, but that more and more American car buyers are willing to make trade-offs between features and price. Over the years, American consumers have favored larger and more spacious cars, especially large pickup trucks and SUVs, which have gradually become the mainstream models on American streets. This trend has been particularly evident in the past decade, with many car companies cutting or even suspending the production of small cars and sedans.
However, as the cost of buying a car continues to rise, this trend is quietly changing. High monthly payments and car maintenance costs have caused many American consumers to re-examine the "bigger is better" concept of car purchasing, and the small car market is beginning to show signs of recovery.
According to data from market research firm Motor Intelligence, sales of small entry-level models such as the Honda Civic and Nissan Sentra have increased significantly this year, with an increase of more than 23% as of November, much higher than the overall single-digit growth rate of the auto industry. In contrast, sales of long-favored large pickup trucks fell by 1.9% this year, and sales of mid-sized SUVs also fell by 2.3% year-on-year. Sales of small SUVs and subcompact SUVs increased by 11.5% year-on-year, and their share of the U.S. market rose from 22% before the epidemic to 27% this year.
The rising cost of car purchase is the main driving factor for this trend. According to data from market drummer J.D. Power, the average selling price of new cars in the United States exceeded $45,000 in November, setting a record high. In addition, insurance premiums, maintenance fees and loan interest rates are also increasing, making car buyers' budgets even higher. Faced with rising monthly payments, many consumers choose to give up models with more space and instead purchase small cars with lower prices and better fuel economy.
According to data from the U.S. auto trading platform Edmunds, sales of the compact car category alone increased by 16% as of November, and market share has begun to rebound after years of decline. In addition, some brands of small SUVs have also achieved amazing growth. For example, Chevrolet's compact SUV Trax, owned by General Motors, has seen sales increase by nearly 89% as of November. The starting price of Trax is US$20,000.
Analysts believe that the return of small cars is not an accident, but that more and more American car buyers are willing to make trade-offs between features and price. "Consumers still want the basic features a car provides, but they are finding that choosing smaller, more economical models can meet their needs while being more consistent with their budget," said Charles Chesbrough, senior economist at Cox Automotive.
Faced with this trend, some car companies have adjusted their product strategies. For example, Toyota and Honda have long dominated the compact car market, and their economical models such as Honda HR-V and Toyota Corolla are widely popular among consumers. Many models start at less than $25,000, further solidifying these brands' leading positions in the economical car market.
This situation makes some dealers feel helpless. Adam Lee, chairman of Lee AutoMalls, a dealer in Maine, mentioned that large pickup trucks and SUVs have been unsold for significantly longer, while more affordable models are in short supply. He bluntly said: "Many car companies follow the trend too much and are ill-prepared when market demand changes." In recent years, American brands such as Ford and Chevrolet have gradually phased out sedans and hatchback models including the Ford Focus and Honda Fit, and instead focused on more profitable SUVs and pickup trucks. The number of models on the market priced below $25,000 has dropped from 45 in 2019 to 11 today.
At the same time, some analysts believe that if the United States imposes tariffs on imported cars produced in Mexico and Canada, it may further exacerbate the "supply gap" problem. This is because many economical models rely on the production of lower labor costs in Mexico, and rising tariffs will directly push up the cost of small cars, thus weakening their price advantages.
Analysts believe that for consumers, cost pressure and practical needs will continue to drive market transformation, and car companies also need to find a balance amid market turmoil.
Of course, some brands are also trying to more accurately target different consumer groups by optimizing their product lines. For example, Nissan is introducing more configuration options for entry-level buyers, while Toyota continues to expand its lineup of compact SUVs. "By optimizing our product line, we can better meet the needs of consumers who are looking for high value for money," said Steven Majoros, Chevrolet marketing chief.