Economic myths about small cars

We (I'm including you, the loyal reader of the small car blog) are not the only ones lamenting the lack of small car options in Canada or the U.S. Is it a conspiracy? Not likely. It's primarily a matter of lack of demand. Although we North Americans do follow the trend of lusting after smaller cell phones, smaller cameras, smaller computers (Although I'm starting to doubt this last one. Have you seen the size of laptops these days? Forget portability, big wide screens are what the masses want apparently.) we buck the world trend when it comes to cars. Mr. John Smith wants his car big; Ms. Jane Doe wants her car to be higher up for a better view and more security. So the car makers (North American for not making them, Foreign for not importing them here) are not totally to blame. It's a culture thing. But we all know that clever marketing (aka. brain washing) can change the psychology of our wants and needs within a generation, heck even less than a decade (my commute to work is 10 minutes, I can't listen to music at work, I have a great stereo at home... why is it that I need an iPod again??)...

But wait! (I hear you economists rumbling out there...) Even if there was a demand for small cars, wouldn't the margins be too low to be worth the while of any manufacturer? Perhaps. But consider this:

First myth: Small cars, small profits. That's the thinking, but great car companies have been built on small cars. The Model T was pretty small and low-priced at times--$500, or some $7,500 today--and it made Henry Ford one of he richest men in the world. Volkswagen came out of the rubble of World War II with a small car, the Beetle, and grew into a world power. Toyota and Honda built their empires on small-car profits. Ford did quite well with its Escorts not too long ago, too. Small cars can make money.

Second myth: Wages here are too high for small cars. VW, Ford and Opel (German GM) make small cars in Germany, where wages are high. That Model T was built by very high priced labor: $5 a day.

-- Excerpt from "The Plot Against Small Cars" in the latest issue of Forbes (if you have a subscription, you can view the article here).

Convinced yet? Anyone want to try to get rich? You need a great psychology-altering marketing campaign, oh yes, and a great car to sell...

GM is to car as Vespa to scooter?

Wrong! It turns out that Piaggio, the makers of the massively popular Vespa line of scooters, once made a car, a tiny microcar to be exact. The Vespa 400 (circa 1957-1960). And "micro" is almost an exaggeration; we're talking a 392cc engine (most motorcycles have larger engines; even Piaggo make some scooters these days that are 500cc), rear wheel drive convertible. And if you happen to live near Toronto, one is available for purchase right now! These are extremely rare, and those still around rarely go for sale.

The small car for nerds

Calling all nerds! Yes you. I bet you're driving a Honda Civic, aren't you? Well, I present to you the 2008 Renault Twingo. 15-inch LCD display; check. Multiple iPod docks; check. USB data ports; check. Internet access; check. Great sound; of course. Oh yes, and it has a drink cooling system too. More photos of this concept car here. Too bad Renault stopped exporting their cars to North America decades ago! Perhaps if enough nerds band together...

Who killed the electric car?

This is not really about small cars (however, a common thread among small autos is fuel efficiency), but nevertheless interesting. I just watched the recently released documentary "Who killed the electric car?"; I stumbled upon it on Google Video here [2007.12 edit: updated link, but it may go down again due to copyright issues]. There seems to be an agenda in the narrative, but it was filled with interesting historical aspects.

But wait! Is the electric car really dead? Here's one that you can actually buy, right now (well, assuming you live in Europe), and it's solar to boot! The Venturi Eclectic.

Will Ford make a new small car?

Yes, there is the 2007 Ford Focus, but only the 3-door hatchback (formerly known as the ZX3) could be considered a borderline small automobile (it is longer than 4 meters). So, are there any plans for anoter small car in the North American Ford lineup? I suppose they could just bring back the Fiesta, which is actually doing quite well in Europe (sales of the Fiesta in the first three quarters of 2006 were up 8.5% over the same period in 2005). But what about something new? Probably not any time soon:

"We have decided to keep away from entering the [very] small car market." -- Ford India's Vice-President for Marketing and Sales, Mr Scott McCormack (in an interview on 2006.10.13 with the indian Business Line newspaper)

Reading the rest of the interview, one gets the impression that Ford doesn't see much future in small cars; they seem to have decided that the profit margins in this segment are too low to be interesting. Margins or not, it seems short-sighted not to have at least some model in the development pipeline. With fuel prices going nowhere but up in the future, Ford's emphasis on big vehicles (SUVs, trucks, excessively large sedans) might put the company further behind than they currently are.

The spectrum of microcars

What is a microcar? The small car of small cars. A commonly used definition is that it's an automobile less than 3 meters in length (for example, the Smart Fortwo qualifies, coming in at only 2.5 meters). The number of wheels is not just limited to 4, but could be 3. In Japan, there is a whole class of microcars, called Kei cars (or K-cars), which are defined by their small engine size (less than 650 cubic centimeters displacement).

From www.moonbeamplans.com:

It's a sort of half-car, which fits into your life as an addition to another car, or to public transportation, which will meet your long-range and high speed travel needs. This limitation of a microcar gives it a bad rap. We immediately compare it to a multi-purpose full size car in terms of highway performance, passenger capacity and comfort, etc., and then don't take it seriously.

Indeed, to compare microcars to larger types is not fair. A true microcar is best suited for short trips within the city (limited acceleration, low speed, tight parking spaces), but not for highway commutes or long trips.

But then there are microcars, like the Smarts, which are being marketed as primary vehicles. They can get up to well beyond the legal highway speed limits, and have longer ranges between refueling. I suppose, for their price (the Smart Fortwo starts at $16,700 CDN), they better be able to serve as primary transportation workhorse.

If you want a cheap microcar, for now the only option in North America seems to be building your own. Check out Jory Squibb's Moonbeam car; he's put up some general instructions and photos on his web site. Since it's based on a scooter (in Squibb's case, an old Honda Elite), maybe you could enlist the help of a local scooter gearhead to build it with you.

Obvio 828

There's small, and then there is tiny! What's not OBVIOus about this brazilian car on first glance is that it's actually a "tribrid" -- a normal gas/electric hybrid, but it also runs on ethanol.

I see the future, and it's small

Small cars are no longer just for city driving. It's no longer just about fuel efficiency either; safety and comfort are now part of the equation. North Americans are now starting to buy small autos not because they have to, but because they want to! This blog will cover the emerging small car revolution.