Americans can only afford small cars.
Americans have had a long lasting love with big cars and fantasies of giant pickup trucks on the open roads, but now many people are finding new love affairs with smaller cars just because they are cheaper.
Sales of small SUVs in the United States jumped 20% in the first half of this year, outpacing overall car sales growth of 2%, according to Data from Cox AutomotiveFurthermore, sales of compact cars increased 18%, sales of compact SUVs increased 12%, while sales of full-size pickup trucks decreased 4% in the same period.
Between one Price increase 19.6% of cars from January 2021 through 2024, most of these compact SUVs cost less than $30,000, with many under $25,000—a marked difference from Price $60,000 of a pickup truck and an easier pill to swallow. Often with lower interest rates Even more than used cars that offer similar features to larger cars, smaller cars have become a formidable alternative.
“Consumers need this functionality,” Cox Automotive senior economist Charlie Chesbrough said in a CBT News Interview in April. “They need the flat floor of a pickup truck or the cargo space of an SUV, but they have to buy a smaller size, because at this price point, they have to find a way to save money.”
As more consumers look to buy smaller, more affordable vehicles, automakers are responding by introducing new features like heated leather seats, rearview cameras and sunroofs that were previously reserved for European luxury vehicles, said Brian Moody, executive editor of Kelley Blue Book. Luck.
But while smaller cars are more affordable and just as practical as larger cars, there are also more compact cars on the market that have been driving sales. Compact SUVs like Mazda CX-50 And Chevy Trax has only appeared on the market within the last 20 years.
“There’s simply more of it,” Moody’s said. “So when there’s more choice, there’s the potential to attract more consumers.”
Changes in the industry
The rise in small car sales “doesn’t mean that people aren’t still buying big pickup trucks,” Moody’s said. top three selling cars in the United States last year—the Ford F-Series, Chevy Silverado, and Ram Pickup—are all large flat-bed pickups. And as vehicle sizes continue to expand since the 1970s There is no sign that big cars will slow down as they are both safe and luxurious, so they continue to be popular.
As demand for large cars and trucks continues, automakers will not go all-in on compact vehicles despite positive sales data, said David Oakley, director of vehicle sales forecasting for the Americas at GlobalData. Luck. For the big three Detroit automakers—Ford, Stellantisand General Motors—compact car production has been reduced by tight profit margins. As cars get smaller, carmakers are under more pressure to offer smaller prices for thinner frames, something they are reluctant to do.
“Compact is the smallest category that most manufacturers are probably going to want to focus on,” Oakley says. “And it seems like anything smaller than that is going to be a little underserved.”
But the industry will continue to make changes to appeal to those looking for affordable, compact vehicles. Moody’s notes that the fourth-best-selling vehicle under the top three pickup trucks is a solid Toyota Rav 4, leading the compact SUV trend after its launch 30 years ago. He expects the compact Toyota model to keep crawling Compact car rankings are increasingly popular.
Moody’s also expects more hybrid compact SUVs to appear, especially as an alternative to electric vehicles, as large and heavy batteryare often oversized and expensive. Even electric car manufacturers are aware of the pitfalls of large electric cars and are moving towards smaller ones.
“We have to start loving smaller cars again. This is incredibly important for our society and for EV adoption,” said Ford CEO Jim Farley. spoke at the Aspen Ideas Festival earlier this month. “We really love these monster trucks, and I love them too, but the biggest issue is the weight.”
But Moody’s argues that the continued success of compact car sales will ultimately depend on whether companies deliver on their promises about them: affordable prices, good resale value and strong luxury features.
“You want them to succeed?” he said. “Make it better.”
