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I really don't get the NA car market. There is a demand for small kei car/trucks as is natural with cities growing and parking dwindling. Yet even compacts are

I really don't get the NA car market. There is a demand for small kei car/trucks as is natural with cities growing and parking dwindling. Yet even compacts are disappearing. My kingdom for an EV compact that is compact. Even the Fiat 500s and Mini Coops feel like they get bigger each year.

sidewndr46 2y ago
Fuel economy standards, emissions standards, safety standards, & profit margins. If you want to sell cars and make money, compacts are not where it is at.
- khafra 2y ago
  Compacts, subcompacts, and microcompacts are very popular in Europe. Is this because Europe has fewer and less restrictive standards for fuel economy, emissions, and safety? I am not an automotive policy expert, but I feel like Europe tends to regulate more than the US does.
  - PetitPrince 2y ago
    One factor to take into account is that streets and roads are narrower (or at least feels narrower). I would be very uncomfortable driving those huge SUV where I live.
    - gedy 2y ago
      Yeah my expat friend owns a midsized (for the US) SUV in Spain, and she finds it incredibly difficult to use in the city she lives in due to the narrow streets + sidewalk cafes.
  - sidewndr46 2y ago
    No, it's because the US has a different set of regulations entirely.
  - troupo 2y ago
    > Compacts, subcompacts, and microcompacts are very popular in Europe. They are also growing in size. Most "compacts" are the size of many regular SUVs from 20 years ago
  - Tuna-Fish 2y ago
    Regulations are not just a more/less choice. They can also be better or worse. This usually comes up when arguing about about FDA, which is uniquely bad at its job. When I try to point that out, people come out of the woodwork and argue as if I'm a nutcase libertarian who wants to abolish all regulations. No, there are countries with drug regulations that are generally tighter, and also the population has had access to UVA-blocking sunscreen for a decade. The regulations that matter here are terribly written regulations that are more lax if your vehicle is bigger. EU has more regulations, but wouldn't ever make that mistake.
    - khafra 2y ago
      FDA Delenda Est, sure. But I'm still glad that seatbelts and frame strength standards aren't optional for auto manufacturers. Maybe we just need to regulate regulatory capture; have penalties for it that actually hurt the pocketbooks of the market juggernauts who try it.
EligibleDecoy 2y ago
Because of a quirk of emissions controls in the US. Longer wheelbases and heavier vehicles can get by with poorer emissions. It was done, at the time, to help semi trailers and other huge trucks meet less restrictive requirements without specifically calling them out but now has led to each manufacturer making vehicles as large as possible so meeting emissions restrictions is more economical.
- Amezarak 2y ago
  This gets brought up on HN every time the subject comes up but it doesn't make sense. It is true that, sensibly, emissions regulations are more relaxed as vehicles get larger. But smaller vehicles are still cheaper to make and sell for lower MSRPs than the same manufacturer's larger cars, and larger cars almost always hugely outsell them. Sadly, this has meant that a lot of small cars, like the Honda Fit, have been discontinued in the US. HN users are not representative. Kei car enthusiasts are not representative. Americans love F-150s, Tacomas, Highlanders, 4runners, RAV4s, CRVs, etc. They by-and-large buy the largest car/truck they can afford. You look up the sales numbers for this stuff and there's just no contest; e.g., CRVs outsold Fits by almost a factor of 10. The marginal gain of "parking is slightly easier in streets or unlined lots" is something most people don't care enough about to buy a smaller vehicle. They prefer the other conveniences of large cars. Is it true that manufacturers like selling larger cars because they have higher margins? Sure; they also like to sell you on the higher trim levels of small cars for the same reason. But Americans are happily making that easy for them.
  - loloquwowndueo 2y ago
    Manufacturers are also not making it easy for people to choose smaller cars. https://www.cbc.ca/news/suv-small-car-affordable-1.7239768 https://www.cbc.ca/news/suv-small-car-affordable-1.7239768
    - Amezarak 2y ago
      The article doesn't really support that claim. Yes, larger vehicles have higher margins, just as higher trim levels do. But it is also true that small vehicle sales are consistently poor. Of course manufacturers aren't very interested in a low-volume low-margin market segment, which led to the tragic death of cars like the Fit. That's why the article you linked says things like: > Long, a sustainable transportation researcher at Simon Fraser University, and Jonn Axsen, professor of sustainable transportation at SFU, undertook a study of 1,000 SUV drivers in the Vancouver area. The study revealed that drivers "see them as superior to cars," said Long. People are happy and willing to pay more for larger cars. Manufacturers are delighted to oblige. Given the choice between a small car and a large car, the typical consumer chooses the larger car. The fact that a small number of consumers like me prefer Honda Fits is not enough to justify their continued production.
infecto 2y ago
Would love to see data otherwise but I don't believe this is the case. I hear this argument a lot for kei vehicles but its still a niche compared to the broader truck market. 2023 units sold, ford ranger 40k, f-series 760k. The kei market is vastly smaller than the ranger market. I am sure that profit margin/advertising plays a mix into the decisions but I also think the consumer largely does not want small cars. Edit: And for small work trucks, most of that market seems to be eaten up by the smaller commercial van vehicles at this point.
- jszymborski 2y ago
  Im not denying that demand for trucks/SUVs is probably has the largest demand of any segment. I guess im more just wondering if the lack of demand for small cars is just that after being absent from the market and seeing the least innovation over the last X years, whether there is some sort of collective amnesia that such a segment exists. Car companies know what they're doing, so im probably just coping. I should stop wishing the free market to do what's right rather than profitable :P
karmakaze 2y ago
That's how capitalism works for vehicles. The same model name continues to grow and increase spending for people looking to buy them when they do. Eventually a new lower model may be inserted below for new buyers, or sometimes the grown model may be reset to a smaller or different form. It's similar to bundling/unbundling cycles which increase expenditure as you try to keep what you want.
consteval 2y ago
I think it's because they are still a relatively niche pick. Ultimately creating a car is very hard (I assume), so they all tend to converge their efforts on the 95%. And the 95% want an SUV or a Sedan. The 5% in dense cities, even if you successfully target and sell to 100% of them, isn't much revenue. Whereas if you make a crappy sedan and only 10% of the 95% consider it, that's STILL more sales. So it might make more sense to simply give up those markets, take that money and dump it into the big sellers. Your Accords and F-150s of the world. To further capture more of the biggest market. So that's my guess.
pandaman 2y ago
That's because of the fixed cost of making another model of a car. Look at what happened to Stellantis trying to bring Fiat 500: after three years of great sales it started to drop pretty quickly to the point where they sold only 16 in the 2023 [1]. Do they make enough profit from selling 16 (or even 1600) cheap cars to afford compliance with the US regulations (they need to crash several cars to get the NHTSA "stars", that's quite a cost even before the cost of the testing itself), stocking spare parts, training mechanics etc? And this is assuming they can sell just the euro model without any retooling, if they need to make a different model for the US market they also need to keep factories tooled for that, keep ordering parts etc. 1. https://www.goodcarbadcar.net/fiat-500-sales-figures/ https://www.goodcarbadcar.net/fiat-500-sales-figures/

sidewndr46 2y ago

Fuel economy standards, emissions standards, safety standards, & profit margins. If you want to sell cars and make money, compacts are not where it is at.

khafra 2y ago
Compacts, subcompacts, and microcompacts are very popular in Europe. Is this because Europe has fewer and less restrictive standards for fuel economy, emissions, and safety? I am not an automotive policy expert, but I feel like Europe tends to regulate more than the US does.
- PetitPrince 2y ago
  One factor to take into account is that streets and roads are narrower (or at least feels narrower). I would be very uncomfortable driving those huge SUV where I live.
  - gedy 2y ago
    Yeah my expat friend owns a midsized (for the US) SUV in Spain, and she finds it incredibly difficult to use in the city she lives in due to the narrow streets + sidewalk cafes.
- sidewndr46 2y ago
  No, it's because the US has a different set of regulations entirely.
- troupo 2y ago
  > Compacts, subcompacts, and microcompacts are very popular in Europe. They are also growing in size. Most "compacts" are the size of many regular SUVs from 20 years ago
- Tuna-Fish 2y ago
  Regulations are not just a more/less choice. They can also be better or worse. This usually comes up when arguing about about FDA, which is uniquely bad at its job. When I try to point that out, people come out of the woodwork and argue as if I'm a nutcase libertarian who wants to abolish all regulations. No, there are countries with drug regulations that are generally tighter, and also the population has had access to UVA-blocking sunscreen for a decade. The regulations that matter here are terribly written regulations that are more lax if your vehicle is bigger. EU has more regulations, but wouldn't ever make that mistake.
  - khafra 2y ago
    FDA Delenda Est, sure. But I'm still glad that seatbelts and frame strength standards aren't optional for auto manufacturers. Maybe we just need to regulate regulatory capture; have penalties for it that actually hurt the pocketbooks of the market juggernauts who try it.

EligibleDecoy 2y ago

Because of a quirk of emissions controls in the US. Longer wheelbases and heavier vehicles can get by with poorer emissions. It was done, at the time, to help semi trailers and other huge trucks meet less restrictive requirements without specifically calling them out but now has led to each manufacturer making vehicles as large as possible so meeting emissions restrictions is more economical.

Amezarak 2y ago
This gets brought up on HN every time the subject comes up but it doesn't make sense. It is true that, sensibly, emissions regulations are more relaxed as vehicles get larger. But smaller vehicles are still cheaper to make and sell for lower MSRPs than the same manufacturer's larger cars, and larger cars almost always hugely outsell them. Sadly, this has meant that a lot of small cars, like the Honda Fit, have been discontinued in the US. HN users are not representative. Kei car enthusiasts are not representative. Americans love F-150s, Tacomas, Highlanders, 4runners, RAV4s, CRVs, etc. They by-and-large buy the largest car/truck they can afford. You look up the sales numbers for this stuff and there's just no contest; e.g., CRVs outsold Fits by almost a factor of 10. The marginal gain of "parking is slightly easier in streets or unlined lots" is something most people don't care enough about to buy a smaller vehicle. They prefer the other conveniences of large cars. Is it true that manufacturers like selling larger cars because they have higher margins? Sure; they also like to sell you on the higher trim levels of small cars for the same reason. But Americans are happily making that easy for them.
- loloquwowndueo 2y ago
  Manufacturers are also not making it easy for people to choose smaller cars. https://www.cbc.ca/news/suv-small-car-affordable-1.7239768 https://www.cbc.ca/news/suv-small-car-affordable-1.7239768
  - Amezarak 2y ago
    The article doesn't really support that claim. Yes, larger vehicles have higher margins, just as higher trim levels do. But it is also true that small vehicle sales are consistently poor. Of course manufacturers aren't very interested in a low-volume low-margin market segment, which led to the tragic death of cars like the Fit. That's why the article you linked says things like: > Long, a sustainable transportation researcher at Simon Fraser University, and Jonn Axsen, professor of sustainable transportation at SFU, undertook a study of 1,000 SUV drivers in the Vancouver area. The study revealed that drivers "see them as superior to cars," said Long. People are happy and willing to pay more for larger cars. Manufacturers are delighted to oblige. Given the choice between a small car and a large car, the typical consumer chooses the larger car. The fact that a small number of consumers like me prefer Honda Fits is not enough to justify their continued production.

infecto 2y ago

Would love to see data otherwise but I don't believe this is the case. I hear this argument a lot for kei vehicles but its still a niche compared to the broader truck market. 2023 units sold, ford ranger 40k, f-series 760k. The kei market is vastly smaller than the ranger market. I am sure that profit margin/advertising plays a mix into the decisions but I also think the consumer largely does not want small cars. Edit: And for small work trucks, most of that market seems to be eaten up by the smaller commercial van vehicles at this point.

jszymborski 2y ago
Im not denying that demand for trucks/SUVs is probably has the largest demand of any segment. I guess im more just wondering if the lack of demand for small cars is just that after being absent from the market and seeing the least innovation over the last X years, whether there is some sort of collective amnesia that such a segment exists. Car companies know what they're doing, so im probably just coping. I should stop wishing the free market to do what's right rather than profitable :P

karmakaze 2y ago

That's how capitalism works for vehicles. The same model name continues to grow and increase spending for people looking to buy them when they do. Eventually a new lower model may be inserted below for new buyers, or sometimes the grown model may be reset to a smaller or different form. It's similar to bundling/unbundling cycles which increase expenditure as you try to keep what you want.

consteval 2y ago

I think it's because they are still a relatively niche pick. Ultimately creating a car is very hard (I assume), so they all tend to converge their efforts on the 95%. And the 95% want an SUV or a Sedan. The 5% in dense cities, even if you successfully target and sell to 100% of them, isn't much revenue. Whereas if you make a crappy sedan and only 10% of the 95% consider it, that's STILL more sales. So it might make more sense to simply give up those markets, take that money and dump it into the big sellers. Your Accords and F-150s of the world. To further capture more of the biggest market. So that's my guess.

pandaman 2y ago

That's because of the fixed cost of making another model of a car. Look at what happened to Stellantis trying to bring Fiat 500: after three years of great sales it started to drop pretty quickly to the point where they sold only 16 in the 2023 [1]. Do they make enough profit from selling 16 (or even 1600) cheap cars to afford compliance with the US regulations (they need to crash several cars to get the NHTSA "stars", that's quite a cost even before the cost of the testing itself), stocking spare parts, training mechanics etc? And this is assuming they can sell just the euro model without any retooling, if they need to make a different model for the US market they also need to keep factories tooled for that, keep ordering parts etc. 1. https://www.goodcarbadcar.net/fiat-500-sales-figures/ https://www.goodcarbadcar.net/fiat-500-sales-figures/