SEMA eNews Vol. 10, No. 18, May 3, 2007

MICROCAR AND SUBCOMPACT SALES FORECASTED

AutoWeek reports that microcars are destined to achieve sales of only 100,000 units per year through 2013. In a recent article, AutoWeek reveals that CSM Worldwide, an automotive forecasting and market intelligence firm, predicts that U.S. consumers will shy away from cars that are smaller than subcompacts such as the Honda Fit and Chevrolet Aveo.

Automakers are anticipating a spurt in demand resulting from increasing fuel prices, which is giving rise to the release of DaimlerChrysler’s Smart ForTwo in 2008, and a possible GM production microcar in 2010 emerging from their recently unveiled three microcars concepts. Nevertheless, according to the article, CSM believes that sales of microcars—cars measuring less than 150 inches long—will dwarf that of subcompacts, which are expected to rise from an estimated 300,000 in 2007 to more than 550,000 in 2013. The reason: consumers will still reap the benefits of excellent fuel economy by having a bigger vehicle overall, comments Dave Terebessy, a CSM analyst.

However, high interest for the upcoming Smart ForTwo, indicated by the sheer number of visitors to the Smart website, demonstrates that there is a lot of “pent-up demand” for this microcar, states Ken Kettenbeil, Smart's director of communications. GM is also making sure that consumers embrace its concept microcars prior to going to production. Not only did the automaker put extra care into designing its concepts—each measuring 141 inches long—by giving them flared fenders for a bigger appearance, they are allowing interested consumers to control the fate of these microcars by having them vote for their favorite one on www.vote4chevrolet.com.

In the end, it may be up to car dealers to push these microcars and resist the urge to upsell to larger and more profitable cars, comments Jim Hall, vice president of the AutoPacific consulting firm.

Source: Kranz, Rick. (April 23, 2007). “Small Cars, Small Profits: Will Americans Embrace the Microcar Trend?” AutoWeek. Retrieved April 26, 2007 from www.autoweek.com.