40-MPG Cars Are Better Than Ever; Too Bad They're Not Selling

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2010 Honda Fit Sport

2010 Honda Fit Sport

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Today's small cars are better than they've ever been, even if few of them are among the EPA's all-time gas mileage champs.

And spurred by tighter fuel-economy laws, 40 miles per gallon on the highway is becoming the new target for subcompact and even compact cars.

There's just one little problem: Not only are 40-mpg models not selling particularly well, the whole small-car segment is anemic at best.

As auto sales have started to recover, the fastest growing segment is midsize sport utilities and crossovers. According to sales data from Ward's Auto, small cars have been the only segment to decline in sales even as sales rose overall. (All data cover the 12 months from October 2009 through September 2010.)

2010 Toyota Yaris

2010 Toyota Yaris

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Declines of 25 percent...or more

In fact, sales of the much-praised 2010 Honda Fit fell a remarkable 26.6 percent, with the older 2010 Toyota Yaris declining more than 30 percent. Sales across the Scion brand, which offers only small cars, plummeted 30.7 percent, while Smart was down 63 percent and Suzuki lost essentially half its sales.

The 2011 Ford Fiesta, new this year, "isn't setting the sales world on fire," in the words of Cars.com. The optional trim level that rates the Fiesta at 40 mpg on the highway doesn't seem to have helped much.

Hybrid sales, too, fell 3.8 percent for 2010 model year offerings. The car that accounts for more than half of all hybrids sold here, the 2010 Toyota Prius, was in short supply just 18 months ago but is now easily available on dealer lots.

2011 Chevrolet Cruze Eco

2011 Chevrolet Cruze Eco

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Gas prices, of course

The culprit, of course, is essentially stable U.S. gasoline prices--which remain at levels far lower than those in much of the rest of the world.

It's a truism that new-car buyers generally opt for the largest, best-equipped vehicle they think at the time that they can afford. Not every buyer, but most of them. And that seems to apply equally in Europe and Asia too.

New entries regardless

Several new compact cars are entering the market, or about to. The 2011 Chevrolet Cruze is now in dealerships, the 2011 Hyundai Elantra will arrive shortly, and the eagerly awaited 2012 Ford Focus will land in a matter of months.

2012 Ford Focus ST

2012 Ford Focus ST

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Then there are the plug-in cars, albeit in small volumes: the 2011 Chevrolet Volt and 2011 Nissan Leaf. Despite high purchase prices, they're essentially sold out for the year. Their real test won't come until 2013, when much higher volumes are available and waiting lists will have been sated.

What will it take?

But it may take the next spike in gasoline prices before U.S. car buyers look again at small and subcompact cars.

In the summer of 2008, remember, when gas prices soared to $4 a gallon or more, buying behavior changed so abruptly that for several months, the mix of models sold would have--if continued--met the 2016 fuel economy standards a full seven years earlier.

But then gas prices ebbed, and gradually U.S. buyers returned to larger vehicles. Which poses a question: What would it take to raise sales of subcompact and 40-mpg vehicles?

Leave us your thoughts in the Comments section, below.

[Kicking Tires, Ward's Auto]

 
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