Ford CEO, Jim Farley, made a rather controversial statement in an interview recently:
We have to start to get back in love with smaller vehicles. It’s super important for our society and for EV adoption. We are just in love with these monster vehicles, and I love them too, but it’s a major issue with weight.
We find this somewhat laughable. As a reminder, Ford once sold small sedans and hatchbacks here in the United States, but decided to discontinue them in favor of more profitable pickup trucks, crossovers, and SUVs. As a result, buyers gravitate toward what’s popular – so if Ford’s CEO truly wants to know why Americans have fallen “out of love” with smaller vehicles, he may want to look at his company.
Recent economic conditions, including high gas prices and inflation, facilitate a desire for smaller cars – in fact, we’d suggest that’s common sense. Yet in the consumer’s moment of need, none of the Big Three American automakers are ready to answer the call. Ford isn’t the only manufacturer that’s sacrificed smaller cars, as Stellantis and Chevrolet don’t exactly hold the high ground here either. Perhaps discontinuing small models was a shortsighted move that every automaker will soon regret.
Ford Killed The Greatest Small Cars
Ford sold numerous small cars over the decades, including the Pinto, Escort, and others, culminating in the Fiesta and Focus, which were sold in sedan and hatchback body styles. Enthusiasts fondly remember the Ford Fiesta ST, Ford Focus ST, and Focus RS as manual transmission hot hatchbacks that delivered superior performance to their Japanese and European counterparts at a lower price. Sadly, these cars were killed off along with their respective nameplates, only to linger for a few more years in Europe.
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While the most recent Fiesta and Focus that were sold in Europe were quite compelling, the non-ST models in the US were plagued with issues from their PowerShift dual-clutch transmissions. Ford was forced to pay millions of dollars in a class-action lawsuit due to recurring shudders, shifting delays, and even unintended acceleration/deceleration. Despite these issues, the Fiesta and Focus sold in strong numbers.
Subcompact cars have never sold in huge volumes in the US, but Fiesta volumes remained consistent from 2010 to 2019. The Fiesta hit a high point in 2013 with 71,073 units, dropping to its worst full year in 2017 with 46,249 units before bouncing back to 60,148 in 2019, its final full year. Ford sold the Focus for much longer, hitting its sales peak back in 2000 with 286,166 units. Sales dropped below 200,000 units from 2005 to 2011 before bouncing back to 269,272 units in 2012, the first year of the third generation model. While the Focus couldn’t keep up that high momentum, it still stayed above 114,000 units until its final full sales year in 2018.
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Looking at Maverick sales, Ford’s smallest pickup truck, it’s clear that American consumers have an appetite for smaller vehicles. Ford sold 77,113 units through Q2 2024, an 81.4% increase from the same time last year. The Maverick is well on its way to having its best sales year ever, besting the 2023 total of 94,058 units.
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Who Else Followed Ford?
Ford isn’t alone in the conundrum that resulted from killing off its small sedans and hatchbacks. In the case of General Motors, this involved three models: the Chevrolet Spark, Sonic, and Cruze. The Chevrolet Spark never outsold the Fiesta, hitting its sales peak in 2014 with 39,159 units. The Chevy Sonic was far more competitive, moving 93,518 in that same year before sales steadily declined, culminating in its death in 2020. The Chevy Cruze sold the best out of the three by far, nearly matching the Focus’ high with 273,060 units in 2014, and hovering above 142,000 units through 2018. The last Cruze was built in 2019, and Chevy only sold 47,975 that year.
Stellantis may not get the deserved credit for killing off small models first, but it actually made the move before Ford or GM. The Dodge Dart was the last small model, at least among the group’s American brands. Dodge only sold the Dart from 2012 to 2017, hitting a sales high in 2015 at 87,392 units. Chrysler and Ram don’t sell small cars anymore – the Jeep Renegade doesn’t count because it’s a crossover. Fiat tried its hand at selling small cars in the US, but peaked at just 46,999 units as a whole brand in 2012, although the brand is offering its latest small EV stateside.
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Gas Prices And Inflation Lead To Small Car Resurgence
Ford, GM, and Stellantis all justified discontinuing their small models due to sales declines, but did they all make their decisions prematurely? Gas prices have decreased since hitting a record high in mid-2022, but they are still up from pre-pandemic levels. Combined with inflation wreaking havoc on prices, most Americans can no longer afford a new vehicle. This could explain why the few cheap cars that are left, like the Nissan Versa and Mitsubishi Mirage, are seeing a sales resurgence.
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The Versa is America’s cheapest new car, starting at just $16,680. The Mirage isn’t far behind, starting at $16,695. In fact, these are now some of the last cars in America that cost less than $20,000. The sales volumes aren’t massive, but the Versa’s 17,812 units through the first half of 2024 was up 61.7% compared to the same period in 2023. Nissan also saw growth from its compact Sentra, which increased by 55% to 89,028 units. The Mirage sold 9,862 units in that time – up 85.6% compared to 2023, even though reports claimed it would be discontinued last year.
We can see similar trends from other automakers when examining Q2 sales. The Toyota Corolla increased by 25.1% year-over-year-to-date (121,991 units), Honda Civic increased 38.1% (129,788 units), Kia Forte increased by 13.6% (70,473 units), Mazda3 increased by 17.8% (17,827 units), and Volkswagen Jetta increased by 100.1% (33,532 units). In the compact segment, only the Hyundai Elantra (down 17% to 62,289 units) and Subaru Impreza (down 22.8% to 14,892 units) have seen sales drops so far in 2024.
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Small Affordable EVs?
Farley promised that a “skunkworks” team is currently working on a $30,000 EV that will be revealed sometime in 2027. That’s a fairly long wait, and we’ve seen how automakers can easily backtrack on EV prices due to inflation: just look at the Tesla Cybertruck, Ford F-150 Lightning, Chevrolet Silverado EV, and others that arrived on the market at higher prices than originally promised or later increased in price.
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Consumers clearly have an appetite for affordable EVs, as evidenced by the Chevrolet Bolt EV having its best sales year ever in 2023 (62,044 units). Sadly, this didn’t stop GM from discontinuing it last year. Chevy will beat Ford to the low-cost EV segment with the next-generation Bolt, which is set to arrive in 2025, as well as the potential return of the Spark as a cheap EV for the masses. We’re holding thumbs that automakers realize the error of killing of small, affordable cars – clearly there’s still a market for them.