Do You Live In the US and Want A Small, Affordable Car? Too Bad.

Car companies are phasing out an entire class of cars. Is it because Americans only like driving big cars? Or because the car companies never bring the good small cars here to begin with?
July 21, 2020, 1:00pm
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Image: Honda

Last week, Honda announced it will no longer sell the Fit in the United States. On its own, this is hardly big news. Car companies discontinue models all the time only to release the “all new” Something-Or-Other a year or two later that is basically indistinguishable from the car they just discontinued.

But the Fit news is different, because they already announced the all new Something-Or-Other, and it’s a newer Fit and it isn’t coming to the US. The announcement also doubles as the final nail in the coffin for an entire category of cars that have existed for generations. The subcompact car is basically dead in the US now. As my former colleague at Jalopnik wrote, the Fit joins the Chevy Sonic, Ford Fiesta, and Toyota Yaris on the chopping block, while the Kia Rio, Hyundai Accent, and Chevy Spark are likely on their way out.

Some car companies, like Ford, GM, and Chrysler are, in fact, no longer car companies in the strictest sense. In the not too distant future, they plan on only selling SUVs, pickup trucks, and vans.

In the US, car companies only market small vehicles during times of high gas prices. Otherwise, they tout how wonderful it is to own big, expensive vehicles, which, incidentally, have the highest profit margins.

But, in a country where participating in society fundamentally requires one to own a vehicle, small cars are a great, relatively affordable way to get around that are more fun to drive than, say, a Chevy Equinox. Look no further than the discontinued Fit, an all-purpose car with solid fuel efficiency (by American standards) that gives you everything you need and nothing you don’t. It’s a hatchback so you can fit a lot of stuff in it by folding down the seats. A brand-new Fit starts at around $16,000 and you can count on it to last more than a decade. Millions of people who buy SUVs every year do not need more than what a Fit offers.

But, I don’t blame anyone for passing on the Fit, because car companies put a lot of energy and engineering expertise into making their “family vehicles” capable of traveling 180 mph. But subcompacts can be so much better than what's been offered in the U.S. And I have a proof, because in many countries they are better.

If you ever want to get upset over the boring, terrible, expensive cars on offer in America, go to the UK version of any automaker’s website. Take Honda, for example. Internationally the Fit is known as the Jazz. In the UK, instead of being killed off, the Jazz got an exciting redesign and is a hybrid. As a result, it’s a little more expensive, but would still likely sell for under $20,000 in the US, which would make it the cheapest hybrid on the market (for Honda models that sell in both countries, the US and UK versions have roughly the same prices in their respective currencies; the Jazz hybrid starts at £19,000).

It’s not just Honda. The Volkswagen Up, which does not exist in the US, is basically a slightly smaller gas-only version of the Jazz that gets up to 60 miles per gallon (!!!) and starts at just over £13,000. It also comes in a cheaper two-door and electric version. (Like Honda, Volkswagen’s prices are also roughly the same between the US and UK versions of cars available in both countries). You cannot find a brand-new car in the US for $13,000, nor a non-hybrid with that kind of fuel economy. In both cases, you’re looking at something like the Fit-like Mitsubishi Mirage, which starts at $14,000 and is the most fuel-efficient gas car in the country at something like 40 mpg.

Car companies say these small cars don’t sell well enough or make enough money in the US. It is true that smaller cars have low profit margins, especially compared to SUVs and pickups. This is perfectly illustrated by the fact that Honda’s entry-level vehicle will now be the “compact crossover” HR-V that is just a slightly taller and longer out-of-proportion Fit and costs $4,000 more.

It is also true that subcompacts don’t sell well in the US. The Fit, for example, sold the best of all of them, peaking at 80,000 in 2008 when the economy was bad and gas prices were high. But it has been slowly declining since, down to just 35,000 last year. By comparison, Honda sold more than 384,000 CR-Vs, a “small” SUV, last year.

And I get why. The CR-V costs only a few thousand dollars more than the Fit, gets a little worse gas mileage but not much, has all-wheel drive which many Americans convince themselves they need even though they don’t, and has more space and the higher riding position which people like. Plus, Americans don’t care as much about gas mileage because gas in the United States is highly subsidized and therefore cheap compared to other countries. No wonder so few people buy the Fit.

But it doesn’t have to be this way. Even without a conversation about the fossil fuel subsidies, better subcompact cars with real value propositions exist. They’re just across the ocean. As Americans go into deeper and deeper debt to buy bigger, more expensive cars that cost more to own, a cheap, reliable, fuel-efficient car will look better and better, especially as the prospects for a post-COVID economic recovery look increasingly shaky.

In announcing the discontinuation of the Fit, Gary Robinson, assistant vice president of product planning, told Automotive News he thinks Honda still has a car for everyone. “I get it that there are people who will be disappointed, but I have complete confidence that what we're going to be able to offer people in the marketplace, they're not losing anything.”

The narrative car companies are telling here is that the marketplace no longer wants subcompacts even as they withhold better, more exciting subcompacts from the marketplace. I think they’re wrong, and people would buy the better subcompacts here, too. Unfortunately, we’ll never find out.

Correction: this post has been updated to reflect that the Kia Rio, Hyundai Accent, and Chevy Spark have not yet been discontinued. Jalopnik wrote they are "on their way out."