Customer demand is just one piece of the puzzle, though. People might not be buying as many small cars as they used to, but automakers also would prefer to sell

Customer demand is just one piece of the puzzle, though. People might not be buying as many small cars as they used to, but automakers also would prefer to sell you something big and fancy enough that chunky margin/markup is easier to justify — both by the manufacturer and by dealers. There's just not but so far the price on something like a Fit or a Yaris can be jacked up before prospective buyers just laugh at you and buy something else. So even discounting demand, automakers and dealers are incentivized to make big, expensive vehicles, which reduces the number of small models available, which in turn further reduces demand as would-be small car buyers can no longer find options that make the right tradeoffs for their situation. In other words, in some ways it's a self-reinforcing cycle that won't end absent external corrections.