Subcompacts are heading towards the compactor.
After years of declining passenger car sales, several automakers have recently abandoned the taste of subcompact frames as SUVs increasingly gain Americans.
Last week, General Motors, the newest company to abandon a subcompact, said it would finish production of the Chevrolet Sonic in October. The Sonic has gone from being a youthful, fuel-efficient symbol of GM to returning after the company’s government-funded bankruptcy in 2009 to almost forgotten at a time of emerging SUV sales.
Simply put, top Americans are no longer willing to sneak into small cars despite their affordable value and fuel efficiency.
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With low gasoline costs and SUVs offering the appeal of a higher position and more shipping space, subcompact car sales fell by 50% in the first part of 2020, compared to the same era the previous year. This decrease is worse than the 23% decline in industry-wide sales, which is largely attributable to the COVID-19 pandemic.
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Jessica Caldwell, an analyst at the Edmunds automotive research site, said the subcompact car probably won’t disappear completely, but only the most powerful will survive. For now, this includes cars such as Honda Fit, Hyundai Accent, Kia Rio and Nissan Versa.
But rising SUV sales in recent years show that Americans would probably never return to small cars, Caldwell said. Several compact cars have also been discontinued in recent years, adding the Chevrolet Cruze and Ford Focus.
“The size of cars has evolved a lot over the last 12 years to get much bigger, so can we go back to a life where we were driving subcompact cars? I don’t think so,” he said. “It no longer corresponds to the psyche.”
In 2019, subcompact cars accounted for 2.7% of vehicle purchases, up from 5.5% in 2012, according to Edmunds automotive studies.
Many buyers of subcompact cars have switched to new subcompact SUVs, such as the Honda HR-V, Jeep Renegade and Hyundai Kona, which have a similar wheelbase and duration but a higher height. According to Edmunds, the market share of subcompact SUVs increased from 0.8% in 2012 to 4.9% in 2019.
In June, Toyota, once widely known for disrupting the U.S. market with its small cars, announced that it abandoned the Toyota Yaris subcompact. And last year, Ford announced that he would no longer manufacture the Ford Fiesta subcompact.
Not that subcompact cars lack sufficient generation or quality. The Chevy Sonic, for example, was named the most productive vehicle in the United States in June in J.D.Power’s 2020 initial quality study.
But GM said it could justify manufacturing sonic “due to falling demand.” Sonic sales fell 85% from peaking from 93518 in 2015 to 13971 in 2019.
He doesn’t abandon small cars. Nissan recently redesigned the Sentra compact car, and the company’s leading chief operating officer, Ashwani Gupta, said the company still believed in the subcompact segment.
“Yes, this segment would possibly decrease, but for us it’s an opportunity because if we put more price on this segment, the visitor may be energized,” Gupta said in an interview.
However, it is a difficult battle, especially amid the COVID-19 pandemic, which accelerates the disappearance of poorly sold vehicles. Automakers can no longer make cars that don’t sell well or generate profits, so they’ll probably continue to slow down their queues, Said Autotrader analyst Michelle Krebs. And SUVs are much more successful than cars.
In addition, buyers who would otherwise have been on the market to purchase a new subcompact car are now less likely to do so.
“Buyers of subcompact cars are very limited through their budget,” Krebs said. “They are more vulnerable to the loss of tasks we’ve seen.”
The trade-off is that there are fewer new cars on the market with an initial value of less than $20,000, leaving them out of success for many Americans. For example, Sonic’s initial value is $16,720, while his brother, the Chevy Trax subcompact SUV, has an initial value of $21,400.
“I think it will lead other people to the used market because new vehicle transaction costs continue to rise,” Caldwell said.
In recent years, the car rental industry would probably have come to the rescue by buying subcompact cars that retailers don’t want. But car rental companies are reeling amid a national slowdown. At least two of them, Hertz and Advantage Rent A Car, filed for bankruptcy in Chapter 11.
Even before the crisis, car rental companies had begun to lose interest in subcompact cars, if only because their consumers don’t need to drive them on vacation, Caldwell said.
According to Cox Automotive, owner of Autotrader and Kelley Blue Book, 4% of new vehicle sales to car rental companies are sub-compact cars.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.