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B-cars Buzz as Sales Soar

Bigger's Not Always Better

By Joe Benton
ConsumerAffairs.com

September 1, 2006

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Big may be better for some car buyers but tiny is selling too as small and subcompact cars gain new respect and increased attention from U.S. consumers with gasoline prices lingering near $3 a gallon.

The pump price is prompting consumers to build a new automotive world where small is not only good, small is affordable and perhaps even better as they conclude there is an alternative to hauling 5,000 pounds of SUV steel back and forth to the gas station for $60 fill-ups.

In response, automakers are restyling and adding features to the tiny car line-up as the U.S. market for the cars is now anything but small. Sales are up 43 percent in the first seven months of the year. Automakers sold 151,848 of the little cars, known in the automotive industry as B-cars.

At last count, the B-car lineup included 8 vehicles from 6 manufacturers: the Honda Fit Sport, Toyota Yaris, Kia Rio5 SX , Nissan Versa 1.8S, Chevrolet Aveo, Pontiac G5, Chrysler Cobalt and the Mercedes SmartCar.

In the next year or so, B-cars could be introduced almost as quickly as new cell phones as the world's automakers try to cash in on the trend first established by the BMW Minis and the Toyota Scion.

Those two trailblazers drove along to automotive fame as sport compacts matured into the mainstream of the automotive world.

Consumers are lining up for the new B-cars. At the top of the tiny car list are a Honda and a Toyota. Demand for the Honda Fit and Toyota Yaris is so intense that dealers sell the cars at or above sticker price before the cars arrive at the showroom.

General Motors Corp.'s Chevrolet has been in the B-car segment since 2003 with the Aveo, a tiny car built by the company's Daewoo division. The Aveo is the best-selling subcompact in the United States and the company is banking on increased sales when it unveils a redesigned four-door version.

The Yaris has been the greatest success so far, with 32,822 sold as of July 31. Even though it was just introduced in March, the funky car is closing in on the Aveo for the top spot in the class.

Gasoline prices are driving the increased interest, but the cars are selling because they're much better than the very small cars known as econoboxes. The Toyota Echo failed because it looked and felt cheap. The new Yaris is much nicer inside and out.

Chevrolet has improved the 2007 Aveo with better materials than its predecessor. The new Aveo, has options such as remote keyless entry, heated outside mirrors and steering wheel audio controls.

Nearly all the tiny cars get 35 to 40 miles per gallon. Prices range from under $10,000 to around $16,000. Technology that includes side air bags and stronger materials is making the cars safer.

Ford's Mark Fields, president of the Americas for the automaker, predicts that sales in the B-car segment will grow to 600,000 by the end of the decade. Fields and said Ford will look at entering the market soon. Ford research shows that fuel economy has risen to among the top three factors that drive auto purchases, along with quality and safety.

When DaimlerChrysler announced that it would sell its tiny two-seat Smart car in the United States in 2008, company officials said it would be marketed in urban areas where traffic congestion and parking shortages make smaller cars more practical.

So far this year however, the surge in tiny cars isn't limited to big cities. The Yaris is selling well in the rural areas.

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