Analyst doesn't think microcars will have much impact on US market
Many of the major carmakers are scrambling to bring tiny cars, smaller than the MINI or Chevy Aveo to the US market in the next few years. Most notable among them are DaimlerChrysler and General Motors and possibly Toyota. DCX has already committed to selling the new Smart ForTwo here beginning in early 2008 and GM signaled their intentions with the Groove/Beat/Trax triplets that were unveiled in New York.
However industry analyst CSM Worldwide doesn't think these cars will make much more of an impact on the market than they do on parking spaces. Dave Terebessy of CSM doesn't expect that total sales in the segment will crack the 100,000 barrier between now and 2013. These cars are all quite a bit smaller than anything currently on the market here, with the GM cars being more than 4 inches shorter than a MINI and the two seat Smart is almost three feet shorter than that.
In order for small cars like this to sell, especially when gas prices remain low relative to the rest of the world, they need to be priced low. That means that profit margins will be thin at best and dealers won't be willing to put much effort into selling them. On the other hand if gas prices spike up over $4 or more a gallon, than these diminutive machines may be able to fetch higher prices and actually make a viable segment.
[Source: Automotive News - Sub. req'd]
Reader Comments (Page 1 of 1)
Andrew 3:46PM (4/23/2007)
Nobody thought the smart fortwo would be a hit in Canada, either, and now there's over 10,000 of them here since being imported starting in the fall of 2004. With the US having even better driving weather, more congestion issues, and 10x the population, I wouldn't be surprised if 100,000 fortwos were running around the USA in the next two years.
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frank78 3:52PM (4/23/2007)
Ya do have to wonder though. Look at the success of Scion Xa and Xb's. The Xb sells at about 50,000 per year.
The minicars will do mediocre individual sales at first I'd imagine, as the subcompact field is getting more crowded. However, unless there is dramatic change, gas WILL be $4 per gallon by 2010, sooner if there is Middle East turmoil, bad US hurricanes, or heck, if Hillary Clinton becomes president.
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Don 5:43PM (4/23/2007)
What are we bitching about again? Gas WON'T hit $4.00 per gallon in the coming years?
Uh, gas might hit $4.00 per gallon THIS summer.
Believe me, these things are the future. Or at least part of it.
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Rick 8:00PM (4/23/2007)
Analysts? What is there evidence based on? There is no current microcar segment in the states, so how can it be assumed have a small impact? And the smallish cars now, 75% of them suck! So, we have 75% of current small cars suck, their gas milage could be much better, styling is boring and price isn't all that much an incentive. Then you have almost NO microcars. Yet somehow, analysts can see that the microcar market won't have an impact?? I can only agree they won't have much impact concerning profits. Keep gas at it's current prices and microcars, especially for the youth, will see very attractive if PRICED right and STYLISH.
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Rick 9:13AM (4/24/2007)
Oh, and t follow up, the cars NEED 4 doors. or the hatch back 5 door. Not everyone enjoys CROUCHING behind a folded forward seat to reach the rear seat.
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Matt 8:30PM (4/23/2007)
Not many people have interest in small cars in the US because when you think small you think something like a Yugo(the people I know atleast).
If the auto makers can put out some small, cheap, cool looking cars I think it's very possible they could take off.
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UncleOxidant 12:06AM (4/24/2007)
I think there are a lot of us here in the US who would jump at the chance to buy a 'micro car', as long as:
1) they don't cost $26K as is the case for the Smart cars now being sold (that's ridiculous - in Italy grad students were driving them). I think $10 to $15K is more like it.
2) they get decent mileage. At least 60MPG. It's doable.
3) they can go at least 75MPH top speed... at least in short bursts.
4) they don't look like Yugos.
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Larry 9:08AM (4/25/2007)
It seems to me that the Wall Street analysts just aren't getting how HUGE the move to PHEV and EVs will be. I have owned Corvettes my whole life and in addition have 2 very large, very inefficient SUVs. If I am ready to jump at the opportunity to be an early adapter to these new vehicles then their success is assured. I think there is going to be lots of money to be made in this seismic shift of the two largest industries in America (autos and oil). The ability to captilize on this change will be bigger than biotech in the 90s and bigger than the internet. Where are the analysts on this? What are the stocks to buy now?
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