Indie Auto reader Troy linked to a provocative comment by bzcat (2025) at Blue Oval Forums about why small cars have disappeared from the U.S. market. Here’s what he has to say:
“Americans like small cars just fine. But CAFE outlawed them. Honda Civic didn’t become so big and wide because customer demands. Honda had to make the footprint bigger so it can hit the ever increasing CAFE target. Ford couldn’t make a Focus that big because its main market is Europe and they wouldn’t accept a Focus that is the size of Mondeo. So Farley made Maverick instead — it is basically just Focus but with longer wheelbase (bigger footprint), and instead of complying with car CAFE, it is easier to do under truck CAFE.
Compact CUV which is what cars have become are the 2nd biggest selling vehicle segment in North America. This didn’t happen by accident. It happened because truck CAFE targets are easier to achieve.”
There is some evidence that the Obama administration’s changes to CAFE’s standards created a loophole that a University of Michigan study warned would allow “the entire auto industry to sidestep some of the more painful efficiency requirements by inflating vehicle footprints.” However, the lead author of the paper, Kate Whitefoot, also noted that “if everything else about the vehicle is the same, consumers prefer the bigger one, with the roomier interior” (Sofge, 2011).
Saying goodbye to subcompacts for under $20,000
Let’s fast forward to 2025, when auto industry analyst Steve Greenfield (2025) has argued that “America’s love affair with larger and larger vehicles continues.” The main reason why is that the U.S. taxes gasoline far less than almost anywhere else in the world. In addition, American roads and most parking spaces are designed to accommodate larger vehicles — and bigger vehicles are viewed as safer.
“As more people buy larger cars, the tendency to want to match the size increases,” Greenfield (2025) contends. “That’s especially true in suburban areas, where there’s more space and bigger driveways. I don’t know how we can ever provide enough incentives to take this trend in the alternative direction and have consumers migrate back towards smaller cars.”
Also see ‘Joe Ligo sheds light on why small cars have disappeared in the United States’
Not everyone shares that view. For example, Mitsubishi dealer owner Tim Bedard recently argued that with “the influx of SUVs and crossovers that have taken over the market, we kind of lost sight [of the fact] that life was and has gotten very expensive for most people, and [they] can’t afford an average crossover or SUV of $30,000. What’s the consumer do now?” (Epp, 2025).
Of course, Mitsubishi has contributed to that problem by halting sales in the U.S. of the subcompact Mirage, which was one of the last two cars available with starting prices under $20,000. The other car, the Nissan Versa, is slated to be discontinued later this year (Epp, 2025).
Could deregulation help or hurt smaller vehicles?
Debates about the impact of CAFE standards may now be moot in the wake of recent legislation, which removed enforcement fines. Whether smaller cars make a comeback will presumably be based entirely on whether automakers perceive it to be a competitive advantage to reenter that market.
In addition, with political pressure reduced in the U.S. to electrify its automotive fleet, automakers may have less of an excuse to heavily focus on high-profit market segments in order to fund their transition.
Also see ‘Could U.S. regulatory rollback lead auto industry to repeat of late-50s backlash?’
Another major factor could be the affordability of cars, particularly in the face of tariffs. With the average price of a new car hovering around $48,000 and the prospect of tariffs increasing them further, automakers may feel the need to adjust course. As a case in point, Toyota has announced that it will be coming out with a “small pickup” slotted below the Tacoma (Priddle, 2025).
My big question: Will the new Toyota be smaller than the Ford Maverick? Even though it functions as the automaker’s entry-level vehicle, the Maverick is a far cry from the subcompact pickups of yore. It is 200 inches long, 72 inches wide and its curb weight is around 3,800 pounds. Are we surprised that the base price of this porker is almost $30,000? I suspect that the Toyota truck would sell much better if it substantially undercuts the Maverick in size, price and gas consumption.
NOTES:
Specifications are from the manufacturer and Car and Driver (2025; Dorian, 2025).
Share your reactions to this post with a comment below or a note to the editor.
RE:SOURCES
- bzcat; 2025. Comment in “Ford wants to revive passenger cars.” Blue Oval Forums. Posted July 26 at 3:15 p.m.
- Car and Driver; 2025. “2018 Ford Focus S Sedan Features and Specs.” Accessed July 28.
- Dorian, Drew; 2025. “2025 Ford Maverick.” Car and Driver. Accessed July 28.
- Epp, Henry; 2025. “The cheap subcompact car may soon be a thing of the past.” Marketplace. Posted April 1.
- Greenfield, Steve; 2025. “Why small cars are disappearing from U.S. dealerships.” CBT News. Posted April 4.
- Priddle, Alisa; 2025. “Toyota’s Cheap Compact Pickup Truck All But Done Deal for America.” MotorTrend. Posted May 22.
- Sofge, Erik; 2011. “Study: CAFE Standards Could Mean Bigger Cars, Not Smaller Ones.” Popular Mechanics. Posted Dec. 8.
I wish the Toyota Tacoma would return in its original form, it was the perfect size truck for a lot of uses and was indestructible. I’m not thrilled with the march toward bloat and height for full size pickups either. Perhaps things like CAFE mandates need to be thought through a lot more carefully, or better eliminated altogether.
What about replacing it with a simple minimum fuel economy standard for all cars and light trucks that increases annually until ICE vehicles are phased out? That would have the advantage of forcing conversion to ZEV at the most expensive end of the market first.
Pushing electric cars seem to be the current groupthink among some, despite few advantages and many disadvantages. That groupthink frequently extends to the idea of forcibly imposing such dogma on the rest of the population rather than letting electric cars find their own place in the market based on their own merits.
At least in the U.S. the market has spoken and the typical new car buyer does not want an electric car. For that matter, I have no desire for an electric car and have no intention of ever buying one. Force the public into it? As we have seen there is only so much that the U.S. government can force on an unwilling populace before the voters rebel against it.
Tony, the basic challenge is that once in a while society is confronted by a new hazard that the “magic of the marketplace” isn’t in a position to solve. For example, remember when the ozone layer got a hole? Governments from around the world came together to phase out chemicals that were causing it. The market wouldn’t have done that. Nor would it have voluntarily embraced basic air-pollution controls and common-sense safety equipment. It took government to make that happen, often with the auto industry kicking and screaming.
What’s disingenuous about that kicking and screaming is that the auto industry has benefitted enormously from government involvement at every stage of its development. For example, private industry did not pay for the interstate highway system. That cost a huge amount of money and its construction resulted in quite a bit of dislocation, so I would imagine that it was not uniformly supported by the public.
So when it comes to climate change, I think that those who argue that the marketplace should be the sole decider need to articulate how the auto industry is going to show leadership in solving the problem — which is the buildup of greenhouse gases. Not with flowery words, but actual, on-the-ground results that move the needle. What’s the plan?
As a point of process, I would remind readers that it is against Indie Auto’s commenting guidelines to traffic in climate denialist propaganda (go here). Those who violate those guidelines may have their comments either edited or deleted.
I lament the death of small cars from the US market. I’ve mostly owned compact or subcompact cars. A subcompact is really all i need. The market is nearly 100 % geared to those who need or want large vehicles. I’m keeping my little Honda as long as I can. Eventual replacement will be a Civic or Corolla assuming they still sell those. If the current Fit or global market HRV was sold here I’d be among the first in line.
If the future is like the past we may see the pendulum swing back to small cars, simply because they can make more sense for some use cases (e.g., as an around-town commuter). The success of AMC under Romney was based on this insight, which strikes me as so obvious as to be banal . . . but apparently it is not among today’s US automotive executives.
It’s too bad that a marginal player such as Mitsubishi doesn’t try harder to fill unmet niches rather than copying what everyone else offers. What have they got to lose?
Most of the cars I have owned over the course of my life have been subcompacts such as a Honda Civic. However, when I was in my younger nomadic phase I appreciated having a panel van. And more recently I bought a Prius V, which has enough cargo capacity to fit my camping gear for longer trips and isn’t so light that it gets buffeted around at highway speeds. That said, if I moved to Europe and still owned a car, I would be inclined to go with a a Fit-sized car.
I think that it would be a wise move for governments to fund transportation research that supports innovation in ALL methods of propulsion. Set goals and standards to provide a direction. Let the lab ideas duke it out.
Plus, allow companies to choose what they would like to produce, within reasoned debate and legislation, and let the free markets decide on a winner. Inform the public of each mode’s features and limitations, and let the people’s buying decisions be their voice and vote. There is a place and purpose for small cars, but the price points are too high, even for the Bezos-funded Slate truck.
Many young folk do not have the money to purchase a home; housing has become too expensive. The average price of current automobiles is much too high for many demographics. Are we going to lock out this generation from buying a new car as well?
I queried AI and found 10 models for sale under $25K with the Nissan Versa S at $20,130 to the Volkswagen Jetta S for $24,220 all prices including destination charges. The vast majority (8/10) of the vehicles are of South Korean origin (including my own Chevrolet Trax) with one North American-assembled Toyota and VW. There are a decent number of vehicles for sale that are relatively inexpensive, reflecting current economic trends.
With regard to de-regulation, I don’t know that it will change vehicles at least in the short term. Vehicle programs are designed and “locked-in” years in advance of release and we’ll not see anything from the changes today for several years. By the time those vehicles are released, it’s possible anything done today will be rescinded by the time the new vehicles appear.
I’ve always felt that CAFE was not well designed legislation, it seemed like a knee-jerk reaction to the 1973 fuel crisis. Why not just levy gas guzzler taxes after a certain mileage/emissions target and let folks buy what they want and can afford? While the exceptions for trucks really saved Detroit’s core competancy (large, body on frame, rear wheel drive, and big understressed motors), CAFE was one of those things that hurt the US automakers.
Like the Bezos-supported Slate small truck, we’ll see if the tiny Toyota truck actually shows up. I would bet that the Toyota will appear, if they were so inclined. I have a hard time imagining that they would want to undercut the Tacoma’s sales with something (I would assume particularly if it’s assembled offshore), is less profitable. My speculation is if the tiny Toyota does show up, it will probably appear as a stripped down truck, but I really think that folks will not buy the base model.
As an example, my previously mentioned Chevrolet Trax is the least expensive model from GM in the US right now. But I rarely see the bottom of the line LS model on the streets around here. I have the Trax 2RS trim level, which is the co-shared top-of-the-line model with the Activ trim level. I see far more Activ and Trax 2RS trim level cars than any other model. Which leads me to believe that at the lower end of the financial spectrum, people will spend to get the conveniences they’ve become accustomed to. I have real doubts that only the most committed will purchase the hair-shirt version of any vehicle.
Besides, the domestics produce actual cars, but only in overseas markets. The Obama-era revisions to CAFE have only reinforced trucks and SUVs as the de rigueur vehicle, nearly everything else is an aberration. It’s going to take a near revolution to get this to change.
I was just viewing a CNBC news segment from eight months ago titled, “Why American Cars Are So Expensive.” They stated that as of September 2024 there were only six models with starting prices under $25,000 (note that the Versa is being discontinued at the end of 2025). Meanwhile, there were 110 models with starting prices at $65,000 and above. The segment suggested that American automakers in particular have been focusing on profits over volume — which would make sense if they were’t arguably overshooting the market.
My guess is that we have entered into a time of unusual volatility and uncertainty when it comes to the public’s automotive preferences. For example, we haven’t seen tariffs so high in almost a century, and we don’t know yet how things will play out in terms of inflation as well as the general strength of the economy. If we move into a recession, I would expect car-buyer habits to shift downmarket . . . at least to the degree that automakers offer a diversity of choices. The Asian automakers appear to be best positioned to navigate the next few years because they haven’t focused so narrowly on trucks and SUVs.