The situation is such that car manufacturers have realized that selling fewer but more expensive cars is more profitable and also, there is a shortage of chips and new car inventory is down and also gas prices are very high and also car manufacturers have largely abandoned the small car market. Which give?
It’s a different time than 2008, when gas prices were sky high and small cars were fashionablebecause American automakers were in crisis at the time and open to ideas and some need a government bailout. Chrysler, even, launched ambitious electric car projects back then before he did. The vibe was that EVs and toy cars were the game, and Hummer was notbecause that’s what the market demanded and the automakers weren’t making money anyway.
The current situation is that many car manufacturers are making money, and they are doing it by not selling small cars, even though the price of gasoline is very high and, in theory, there should be a demand for smaller cars, more fuel efficient cars. The problem with that, however, is that the bigger cars in 2022 are more fuel efficient than they were in 2008, so there’s less pressure on automakers to go small, because a The base Ford F-150 gets 25 mpg combined in 2022, and it got 16 mpg in 2008, when a Honda Fit got 30.
That is to say, there’s also less pressure now to go small for consumers, while dealerships and automakers can argue that a massive shift to electric vehicles is imminent. Inventory, in any case, is the most immediate issue, as people buy everything they can get. The Wall Street Journal took stock of the situation on Sunday:
Typically, a $2 increase in gas prices is enough to change consumer behavior, but in today’s market it’s hard to quantify that change, said Jay Joseph, vice president of marketing and customer experience at American Honda Motor Co.
“We don’t see a real open market,” Mr. Joseph said. “If we had cars on the ground, I think we would see a temporary shift to passenger cars at the moment. But there is no supply of anything.
“Even if you get something a little bigger, it’s more fuel efficient than it was back then,” said Jessica Caldwell, automotive analyst at Edmunds.
Some automakers, such as Honda, Toyota Motor Corp. TM +2.51% and Hyundai Motor Co., are better positioned to accommodate buyers looking for better fuel economy, mainly because they have stuck with their small car and sedan offerings. The challenge is that they don’t have many in stock, she added.
The WSJ also quotes a dealer who says high gas prices are helping people become aware of electric vehicles, which, great, but also most people can’t afford to buy a new electric vehicle. , because they are too expensive in America, even with government subsidies. .
Anyway, think of a Mitsubishi Mirage as your next car purchase, if you can find one, because now might be the worst time in history to be on the hunt for a fuel-efficient small car. Or at least a small car with modern safety standards. And, of course, the death of small cars will only be final when the BMW 3 Series disappears, but this car is as affordable as an electric vehicle. Small cars may or may not make a comeback in America, but we sure could use it.