Drivers Try Downsizing
A new wave of small-car models could soften the sting of $3-a-gallon gas
For all the moaning about gas prices, Americans have remained surprisingly committed to spacious sedans, big SUVs, and V-8 engines. But an influx of petite, enticing imports--some of the smallest cars on U.S. roads since the tiny Honda Civic debuted in the early 1970s--is about to muscle a few gas guzzlers off the highway.
The timing, obviously, couldn't be better for drivers--or for manufacturers like Toyota, Honda, Nissan, and even ailing General Motors, which are rolling out the high-mileage vehicles just as gas is cresting $3 a gallon. And these aren't the utilitarian boring mobiles many people think of when considering an economy car. The Toyota Yaris turns heads in midtown Manhattan, its perky, bubble-shaped chassis distinguishing it from BMWs and Jaguars. The forthcoming Nissan Versa will have a sporty six-speed manual transmission and 15-inch tires comparable to those on larger sedans. The Honda Fit has an advanced electronic throttle and a lightweight aluminum-alloy engine that make for brisk, if thrifty, motoring. "It's really fun to drive, and there's a lot of pep to it," says Scott Miller, 36, of Indianapolis, who traded in his '05 Chevy Suburban SUV for a Fit last week. "It's pretty cool looking, too."
Shifting gears. With or without such new alternatives, rising gas prices finally seem to be driving consumers toward more economical choices--and ringing out the era of the SUV. After relatively minor changes in buying habits over recent months, even after the Gulf Coast hurricanes sent gas prices soaring, car sales in April finally showed a definitive shift from big to small. Sales of SUVs and other light trucks dropped 7.7 percent, while sales of passenger cars--which had fallen to less than half of all vehicles sold--rebounded by 0.5 percent. Midsize SUVs like the Ford Explorer and Chevy TrailBlazer tumbled by nearly 13 percent, while smaller SUVs like the Toyota RAV4 came on strong.
As has typically been the case lately, the shift in consumer tastes is benefiting the Japanese automakers at the expense of Detroit. Domestic automakers' market share slipped to 53.3 percent in April, down 3 percentage points from a year earlier. Toyota's market share hit 15.2 percent--eclipsing that of Chrysler for the first time ever. Honda and the twin Korean manufacturers, Hyundai and Kia, inched upward, too. The big winners were mostly modest sedans like the Toyota Corolla and the Hyundai Sonata--along with several of the diminutive new entries from overseas.
It's not just gas prices that make the new small cars appealing. Manufacturers think that car buyers--20-somethings, especially--are tiring of big, garish vehicles. Miller, for instance, wanted to improve his fuel economy and lower his gas bill, but he also wanted a car that would be easier to park in his tight driveway. The Honda--more than 3 feet shorter and a foot narrower than the hulking Suburban--fit the bill. The arrival of appealing gas misers may draw buyers away from gas guzzlers. Ford Motor Co. sales analyst George Pipas predicted last week that passenger cars will outsell SUVs and other light trucks for the rest of the decade, reversing the trend of the past 15 years.
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