With gas prices going up and car owners downsizing from V6’s to four cylinders and from luxury models to economical subcompacts, the question for automakers becomes; how do we remain profitable? As the automotive big wigs descend on Geneva with their latest and greatest models, this issue is weighing heavily on many minds. So, how does one do it?
Well, there are a few answers to this conundrum, one of which is move your subcompact cars upmarket. MINI has done it, Toyota is sort of doing it with the iQ and no doubt many of the world’s other automakers would very much like a piece of that pie. The answer lies very much in the look of a car: its design and the ambiance it gives off.
Ex-Fiat Chairman and current Ferrari CEO Luca di Montezemolo puts it succinctly: “Today, if you make small cars you cannot make poor cars. Even cars that are not expensive are making a big effort to present nice, good design, with accessories and color.”
Look at the radical design Mazda and Ford have taken with their otherwise staid Mazda2 and Fiesta models respectively, or compare the slab-sided Fiat Cinquecento of the 1990s with the current generation 500. Like that old adage says, “Sex(y) sells,” and even more so when it comes to cars.
Nissan cites the Juke as the perfect example of “form over function”; the small, youth-orientated SUV-wannabe commanding a hefty (for what it is) price tag of €18,000 (US$25,000). Then there’s the Range Rover Evoque, a car that goes against the company’s grain so much it seems like it came out of an alternative universe.
As an alternative to prettying up your smaller cars, car companies can make their bigger cars more appetizing to fuel price conscious buyers by making them more efficient. Automakers spend millions making subtle improvements in vehicle efficiency and investing in hybrid and EV drive systems.
Still, it will be an uphill challenge for many automakers attempting to make small and green the buzzwords of American car buyers. In the country that gave us the Cadillac Eldorado, the International CXT and the Hummer H1, can small, economical cars ever be more than an unhappy concession made by penniless motorists? Only time will tell.
By Tristan Hankins
Sources: NY Times