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niky · 06-26-2012, 11:07 PM

The imports got their foothold because of several factors. Yes... they made small cars, but so did the domestics. The big difference was that the domestics made truly, incredibly horrible small cars compared to the imports... and imports were cheap (thanks to the undervalued yen). Add to the fact that Japanese companies were well-versed in making small displacement cars, where domestics saw anything below 3 liters as "small enough", and you had a recipe for disaster in the making for the domestics during each and every gas crisis that followed. People would still buy more domestics, even during periods of high gas prices, but they would be buying their lower-end models... which would then put off those buyers from either: 1. Buying more from the brand or 2. Buying another small car.

After gas-crisis induced purchases, the higher build quality hooked buyers, who then went on to buy more of the same for the next three to four decades, but sometimes in a bigger size. Imports didn't gain a lion's share of the market overnight. They gained it by consistently giving people good cars, whatever the price point. This is the same reason Hyundai and Kia are gaining so much market share. They make incredibly cheap cars with decent quality... and that means they are gaining market share over the (now more expensive) Japanese.

Small cars are only important to manufacturers in the US because they're entry-level "hooks" for some buyers... not because they sell them in high volume.

But... you can't exist on small cars alone. In a market where the top-selling car (not truck) is the absolute biggest car Toyota sells in most other markets (the Camry), then focusing simply on small cars (like, say, Suzuki does), is a death sentence.

-----

Side note:

The Honda Fit was originally merely the same size as, say, a mid-90's civic. The current Fit is nearly the same size as the ES-EP Civic inside, and is correspondingly heavier than the previous generation.

The Honda Civic is now, with the FB body, even bigger than the already big ES-FD generations... which are old Accord-sized. It's so big that Honda has discontinued it in Japan due to lagging sales. Sales are lagging because it's just too big for your typical Japanese urban commuter, who is better served by the cheaper Fit or Fit hybrid.

The Honda Brio is Honda's truly "small" car, and it won't make it to the US. The US subsidiaries of car companies have a hard time selling truly small cars in the US, unless they're sold as fashion accessories (MINI, SMART, Fiat 500). Chevy has been promising the Spark for years... and it's been pushed to 2013 or 2014. Hyundai, Suzuki and Kia already sell cars that get 60 mpg, meet EuroNCAP crash requirements and cost peanuts, none have any plans of going stateside, because they know they won't sell in big enough numbers to make it worth the trouble, especially considering the marginal profit margins you get on such cheap cars.

Selling just a few thousand i10s at a minimal profit margin through a nationwide network of dealers compared to just a few hundred Genesis sedans at a bigger profit margin? No brainer. Just moving the i10s around the country would represent a loss for the company!

Guys like us wouldn't bat an eyelash at buying a small, small-displacement car with a manual transmission that gets 60 mpg. In fact, we'd be ecstatic if we could. But most consumers value something besides fuel economy. Without any impetus to steer them towards economy... like... say... a fuel crisis... like in 2008 where buyers across the board went down one or two size segments in brand new purchases... then there's nothing you can do about it. And once the crisis passes, or once people get used to paying more for gas, they go back to buying bigger vehicles.

The same holds true elsewhere. In other countries, people buy smaller, more economical cars only because taxes push them to do so. In fact, most people motorbike. But when people get more prosperous, they migrate up the automotive ladder as high as they can... which is why the Tata Nano's sales are dismal compared to bigger, more "car-like" cars

06-26-2012, 11:07 PM	#103 (permalink)
niky Master EcoModder Join Date: Aug 2010 Location: Philippines Posts: 2,173 Thanks: 1,739 Thanked 589 Times in 401 Posts	The imports got their foothold because of several factors. Yes... they made small cars, but so did the domestics. The big difference was that the domestics made truly, incredibly horrible small cars compared to the imports... and imports were cheap (thanks to the undervalued yen). Add to the fact that Japanese companies were well-versed in making small displacement cars, where domestics saw anything below 3 liters as "small enough", and you had a recipe for disaster in the making for the domestics during each and every gas crisis that followed. People would still buy more domestics, even during periods of high gas prices, but they would be buying their lower-end models... which would then put off those buyers from either: 1. Buying more from the brand or 2. Buying another small car. After gas-crisis induced purchases, the higher build quality hooked buyers, who then went on to buy more of the same for the next three to four decades, but sometimes in a bigger size. Imports didn't gain a lion's share of the market overnight. They gained it by consistently giving people good cars, whatever the price point. This is the same reason Hyundai and Kia are gaining so much market share. They make incredibly cheap cars with decent quality... and that means they are gaining market share over the (now more expensive) Japanese. Small cars are only important to manufacturers in the US because they're entry-level "hooks" for some buyers... not because they sell them in high volume. But... you can't exist on small cars alone. In a market where the top-selling car (not truck) is the absolute biggest car Toyota sells in most other markets (the Camry), then focusing simply on small cars (like, say, Suzuki does), is a death sentence. ----- Side note: The Honda Fit was originally merely the same size as, say, a mid-90's civic. The current Fit is nearly the same size as the ES-EP Civic inside, and is correspondingly heavier than the previous generation. The Honda Civic is now, with the FB body, even bigger than the already big ES-FD generations... which are old Accord-sized. It's so big that Honda has discontinued it in Japan due to lagging sales. Sales are lagging because it's just too big for your typical Japanese urban commuter, who is better served by the cheaper Fit or Fit hybrid. The Honda Brio is Honda's truly "small" car, and it won't make it to the US. The US subsidiaries of car companies have a hard time selling truly small cars in the US, unless they're sold as fashion accessories (MINI, SMART, Fiat 500). Chevy has been promising the Spark for years... and it's been pushed to 2013 or 2014. Hyundai, Suzuki and Kia already sell cars that get 60 mpg, meet EuroNCAP crash requirements and cost peanuts, none have any plans of going stateside, because they know they won't sell in big enough numbers to make it worth the trouble, especially considering the marginal profit margins you get on such cheap cars. Selling just a few thousand i10s at a minimal profit margin through a nationwide network of dealers compared to just a few hundred Genesis sedans at a bigger profit margin? No brainer. Just moving the i10s around the country would represent a loss for the company! Guys like us wouldn't bat an eyelash at buying a small, small-displacement car with a manual transmission that gets 60 mpg. In fact, we'd be ecstatic if we could. But most consumers value something besides fuel economy. Without any impetus to steer them towards economy... like... say... a fuel crisis... like in 2008 where buyers across the board went down one or two size segments in brand new purchases... then there's nothing you can do about it. And once the crisis passes, or once people get used to paying more for gas, they go back to buying bigger vehicles. The same holds true elsewhere. In other countries, people buy smaller, more economical cars only because taxes push them to do so. In fact, most people motorbike. But when people get more prosperous, they migrate up the automotive ladder as high as they can... which is why the Tata Nano's sales are dismal compared to bigger, more "car-like" cars Last edited by niky; 06-26-2012 at 11:17 PM..