A lot of the analysis on this issue relates to the supply side of the market - manufacturers maximising margins and increasing safety standards - but the demand

A lot of the analysis on this issue relates to the supply side of the market - manufacturers maximising margins and increasing safety standards - but the demand side plays a role too. For the past fifteen years, we've lived with negligible interest rates and (for most people) stagnating wages. This encourages consumers to cut back on small-ticket items but splurge on items bought on credit (mostly houses and cars). This environment is crumbling: many older people went into retirement (or were forced into it) during the pandemic, and many working mothers found that the cost of childcare exceeded their contribution to the household finances; this reduced labour pool coupled with increasing interest rates (in part a response to that smaller labour pool) will push car buyers to be more thrifty. I expect to see smaller cars return to dealer forecourts in the next couple of years, especially in Europe.