By
updated 3/2/2004 2:54:41 PM ET 2004-03-02T19:54:41
ANALYSIS

In America — the land of super-sized products — cars like the Chevrolet Cavalier, the Audi A4, the BMW 325 and the Ford Focus are considered small. These vehicles range in length from 168 inches to 183 inches.

Yes, you can find even smaller cars here, such as the Kia Rio at 167 inches, the Toyota Echo at 165 inches or the Toyota Scion xB model — that's the one that looks like a box — at 155 inches. With the exception of Toyota Motor's Scion, I figure many of these thriftmobiles end up at airport rental lots. And while some sports cars —like the Mazda Miata, at 156 inches in length — are on the short side, most people don't buy such sexy cars for their fuel efficiency or practicality.

In other parts of the world, tiny cars are basic transportation for the masses. But here we have used cars, and you can buy a good pre-owned car in this country for less than a new tiny car. In the United States, the really small cars like the VW New Beetle (161 inches long) and the BMW Mini (143 inches) are for the well-to-do, not poor folks.

The Mini sold 36,000 units here in 2003, and a convertible is coming this year. That might push sales to 50,000 per year. Minis sell from $20,000 to $25,000 or more.

Volkswagen sold 57,000 New Beetles here last year, including the convertible. I love the New Beetle, too, but it is unlikely to again be as successful as it was in 1999, its first full year in the U.S., when dealers moved 83,000 cars. In a market of 17 million new cars and light trucks per year, the modest volume of vehicles such as the New Beetle and the Mini isn't proof of a trend.

While I see no signs that U.S. consumers are clamoring for small cars, more such vehicles will arrive in dealerships within the next few years.

The Smart Formore, made by DaimlerChrysler's Mercedes-Benz division, is headed to our shores, starting in 2006. The Mercedes folks are hoping to sell 30,000 Formores per year in the U.S. The original Smart car is only 98 inches long, and while Mercedes hasn't released dimensions for the Formore, my guess is that it is about 160 to 165 inches in length.

Two years from now, we're also likely to see an updated version of the little Mercedes A Class. We're probably talking about something that's 170 inches long, or around the size of the Pontiac Vibe. The word is that this model will be sporty like the Vibe.

BMW will also have a new entry here that's smaller than its current 3 Series. To be called the BMW 1 series, these models will be about the size of the original — and well-loved — BMW 2002, or more akin to the VW Golf in size.

A hatchback BMW 1 will go on sale in Europe next year, but that won't come to the United States. Most likely, the first model here will be a straight two-door, probably in 2006. You can figure on a price near $25,000.

Honda Motor is also flirting with the idea of importing a model that's smaller than its Civic. And Ford Motor says it is thinking about something small, but it would probably depend on Mazda to supply the vehicle, so I wouldn't count on much from Ford. Yes, Ford builds a cute minicar, the Ka, in Europe, but it just won't meet our safety rules.

If all these manufacturers are preparing small cars for this market, you can be sure that several of their rivals are also working on similar vehicles. Are all these entries going to be successful? And are we entering a new era of small cars? I don't think so on either count.

I can't find any sign of a mass market for tiny cars in the U.S. That is, not as long as gasoline here is well under $4 per gallon, unlike in Europe and Asia, where many of these cars originated. Another problem is that the vehicles on our roads are so big that it's a little scary to be driving around in a tiny car.

Price is also an issue. BMW has been successful with its Mini because it can sell a relatively small number of vehicles at a premium price. In this market, small cars usually mean small prices, and that means little or no profits for the manufacturers.

So why are car companies pursuing this market? Well, if they can get top dollar for them, as BMW does with Mini, they may be profitable. Those cars are cute and win points with buyers. Plus they bring down their corporate fuel-efficiency figures and may gain favor with the environmentally conscious.

You never know, it's possible that tiny cars just might become popular in this country. But I don't see that happening.

© 2012 Forbes.com

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 2.79%
$30K home equity loan FICO 5.78%
$75K home equity loan FICO 4.54%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.57%
13.57%
Cash Back Cards 17.91%
17.91%
Rewards Cards 17.15%
17.15%
Source: Bankrate.com