A tumultuous year: Small never looked so good!

Due to other ventures, this blog has languished to the bottom of my priority list. Perhaps it's fitting given the tumultuous year it has been in the auto business; just keeping up-to-date on the drama of the American Big Three (GM, Chrysler, Ford) would be a challenge, rendering some posts obsolete within days (case in point: the small Pontiac G3: discontinued shortly after being released). After all, this blog is not about mergers, buy-outs, bail-outs, bankruptcies or subsidies: it's about small cars.

Overall, the economic downturn has been good for "small", and not only for cars, but as a general philosophy of frugality, of living more simply. In the car sector, the recession has accomplished what $150 USD/barrel oil, and the resulting high gasoline prices, last year couldn't: people are now actually buying small cars in droves. In Canada, DesRosiers Automotive Consultants showed that by the end of 2008 the market share of sub-compact cars reached 8.7% (of total automobile sales), double the previous year's numbers. It's not a stretch to think that for 2009 the market share will be well into the teens. In the United States, the popular Cash-for-Clunkers program (which was just extended by the U.S. Senate yesterday evening) has propelled the small-ish Ford Focus to a top seller. In the U.K., which has their own scrappage program, it's a small car (the Ford Fiesta) leading the pack as the top car being chosen after trade-ins.

These are exciting times for small car enthusiasts. If this was 1969 again, Honda might have thought twice before dropping the idea of the selling the small 600 here in North America. This time around, I hope companies stop heeding the old stereotypes that imply that we need bulkier, faster, gas guzzlers just because we live on this side of of the world. Let's hope that we the consumers are the ones who are allowed to make a choice from the full spectrum of products, including the small cars available in the rest of the world.

Which ones am I anxiously waiting to test drive? The TH!NK city (a small electric car), the Fiat 500 (just awarded the title of "Best City Car" for 2009 in the U.K.) and the Toyota iQ (a tiny car that's much sexier than the Smart car). Hurry up and bring them over to this side of the Atlantic!

Are two small cars better than a mini van?

With dual-income families on the rise, it is not uncommon for families, especially those with younger children, to have a mini van and a second vehicle for one of the working spouses. But is having a mini van truly necessary? Perhaps it would be more economical (and better for the environment) to have two small cars, and for special events or trips, when a larger vehicle is necessary, rent a mini van for the day or weekend. One Ottawa blogger ponders the question: Are two small cars better than a van and a compact?

Small is greener than hybrid

After electrics and hydrogen-powered, hybrids have the least emissions -- right? Not necessarily! The carbon dioxide rejection rate is roughly the same for a Toyota Prius (touted as the most efficient hybrid currently on the market) and a Citroen C1 (a smart-looking small car, sadly not available in North America) -- roughly around 100ish grams per kilometer. I'm sure that an even smaller car, such as a Smart car, would be even lower...

But that's just the start. One could then argue that the environmental footprint of the C1 is smaller than the hybrid Prius simply because it can be manufactured with less stuff; it is lighter, its engine is simpler, it is easier to recycle. Not to mention that its smaller physical size is good in other ways; it doesn't require as wide a road to operate, needs smaller parking spaces, etc. -- so it doesn't comtribute to the general encroachment of paved space into the world's green spaces.

I don't buy the way hybrids are presented as the responsible, green choice. It's good marketing for sure, but the truly environmentally responsible choice is to go small!

(Hints to Citroen: make a hybrid version of the C1, oh and don't forget to bring it over to the U.S. and Canada!)

Chrysler: The canary in the "big car" coal mine?

This week DaimlerChrysler announced some pretty significant job cuts. The affected plants are located in Michigan, Ohio, Indiana, and Ontario -- speficially, those involved in the production of sport utility vehicles, pickup trucks, and other large vehicles. These types of vehicles, we're told by DaimlerChrysler, are just not selling as well as they used to. This is certainly not just a Chrysler-specific phenomenon. Rather, it is early evidence of the eventual move towards smaller vehicles in North America. Although the general public is not clamoring for small cars quite yet, there is an unmistakable trend towards higher fuel efficiency. This the first step. Unfortunaely for Chrysler, they are not very well positioned for the "small" future -- their smallest vehicle available is the PT Cruiser -- perhaps destining them to be just a small player in the auto field. There is currently a lot of buzz around about Daimler spinning off Chrysler, and business news headlines are filled with talk of potential buyouts or mergers (particular with GM). If I were a potential suitor looking at Chrysler, I would only value it as a future niche player; they are pretty good at making "pimp-mobiles" after all, such as the Chrysler 300 that's still a hot item in the hip-hop world.

Economic myths about small cars

We (I'm including you, the loyal reader of the small car blog) are not the only ones lamenting the lack of small car options in Canada or the U.S. Is it a conspiracy? Not likely. It's primarily a matter of lack of demand. Although we North Americans do follow the trend of lusting after smaller cell phones, smaller cameras, smaller computers (Although I'm starting to doubt this last one. Have you seen the size of laptops these days? Forget portability, big wide screens are what the masses want apparently.) we buck the world trend when it comes to cars. Mr. John Smith wants his car big; Ms. Jane Doe wants her car to be higher up for a better view and more security. So the car makers (North American for not making them, Foreign for not importing them here) are not totally to blame. It's a culture thing. But we all know that clever marketing (aka. brain washing) can change the psychology of our wants and needs within a generation, heck even less than a decade (my commute to work is 10 minutes, I can't listen to music at work, I have a great stereo at home... why is it that I need an iPod again??)...

But wait! (I hear you economists rumbling out there...) Even if there was a demand for small cars, wouldn't the margins be too low to be worth the while of any manufacturer? Perhaps. But consider this:

First myth: Small cars, small profits. That's the thinking, but great car companies have been built on small cars. The Model T was pretty small and low-priced at times--$500, or some $7,500 today--and it made Henry Ford one of he richest men in the world. Volkswagen came out of the rubble of World War II with a small car, the Beetle, and grew into a world power. Toyota and Honda built their empires on small-car profits. Ford did quite well with its Escorts not too long ago, too. Small cars can make money.

Second myth: Wages here are too high for small cars. VW, Ford and Opel (German GM) make small cars in Germany, where wages are high. That Model T was built by very high priced labor: $5 a day.

-- Excerpt from "The Plot Against Small Cars" in the latest issue of Forbes (if you have a subscription, you can view the article here).

Convinced yet? Anyone want to try to get rich? You need a great psychology-altering marketing campaign, oh yes, and a great car to sell...

I see the future, and it's small

Small cars are no longer just for city driving. It's no longer just about fuel efficiency either; safety and comfort are now part of the equation. North Americans are now starting to buy small autos not because they have to, but because they want to! This blog will cover the emerging small car revolution.