More than high gas prices fueling small car sales
Go figure. The price of gas at the pumps goes up, and people start buying smaller new cars. That’s the easy conclusion industry analysts like Dennis DesRosiers came to when looking at the detailed Canadian new car sales figures from this April.
Sure. Sales of wee subcompact cars were up 17.1 per cent, compact cars up 11.3 per cent, and compact sport utility vehicles up 16.6 per cent can all be related to per litre prices ranging anywhere between $125 and $1.50, depending where you live and what time of the day it is.
But I posit that it’s more than just the high price of gas that’s fueling small car sales (in fact, DesRosiers' figures show that year-to-date sales of the most fuel efficient vehicles—like hybrids—actually “underperformed the overall market”). Simply put, it's the product: small cars aren’t, well, so “small” anymore, which makes the decision to downsize a little bit easier.
Compare the barebones Fiesta Ford last sold here in the late-1970s to the new one launched last year. Not only is the new Fiesta larger, it’s safer, more comfortable, and has big car features like heated leather seats and navigation.
One size up, so-called all-new compacts like the Chevrolet Cruze, Hyundai Elantra (above) and Volkswagen Jetta are about the size of a midsize family sedan from a couple of generations ago. And these cars too can be outfitted like a luxury car to make the jump “down” a cushy landing.
Also helping is the old adage that “new product sells.” All-new subcompacts like the Fiat 500 are getting all kinds of attention from us media. And with impendingly higher fuel economy regulations to meet, automakers are ploughing more small cars into the market—and advertising them—like never before.
So, yeah. Some buyers will downsize to save some money at the pumps. But I think a bigger reason in the upsurge in small car sales is simply more choice and a better product.
[Sources: The Star, DesRosiers & Associates]