City Car Apocalypse

I never thought I'd live to see the day that small cars would start disappearing from European showrooms and, ultimately, European streets.

Numerous European auto companies have been discontinuing small cars commonly seen in postcard photos on Paris, Rome and Munich, such as the Volkswagen up!, the Fiat Punto (above) and the Citroën Picasso, and even the Ford Fiesta - one of the most popular cars in Britain in the past half century - has been discontinued.  (Ford ended production of the Fiesta in 2023, four years after discontinuing it in North America.) 

European automakers blame the shrinking city-car market segment on, of all things, emissions regulations.  They insist that European emissions standards regulating carbon dioxide are getting so tight that small cars can't possibly meet them, and they also point to the growing investment in electric cars that, they say, make small gasoline-powered and diesel-powered cars less necessary.  Yet, demand for small internal-combustion-engine cars is still strong in Europe, even as it continues to wane big time in the New World (the Mitsubishi Mirage, a car no one liked, not even subcompact fans, was discontinued in North America after 2023.)  So what is the average European car buyer to do, with so many city cars disappearing from the market?

Buy a compact SUV.

Writing for Euractiv.com, Julia Poliscanova, senior director for vehicles and electric mobility at the environmental non-governmental organization Transport & Environment, notes that her organization has tracked new-car sales in the Old Country and found that someone who would have once bought a Fiat Punto or a Ford Fiesta is opting for a compact SUV that is positioned in the same European Union market segment. The bestselling European car in Europe in 2023, the Dacia Sandero, a traditional SUV from Romania, was the second-bestselling vehicle in Europe overall in 2023 - behind the Tesla Model Y.  The third-bestselling car last year in Europe, predictably, was a Volkswagen.  Unpredictably, it was not the Golf but the T-Roc sport utility vehicle (below).  The Golf came in seventh.

Poliscanova finds the argument about how small cars have to be sacrificed in order to meet tougher emissions standards to be spurious at best, cynical at worst.  Compliance with regulations, she writes, is "averaged across all sales, not per car.  So, while selling only [gasoline] and diesel cars will land you fines, selling smaller combustion models (that emit comparatively less CO₂) will mean less electric cars need to be sold to balance emissions.  The smaller, lighter vehicles also lead to more significant economies all around, given the growing raw material and energy costs."

The real reason for a shift to larger cars in Europe, Poliscanova argues is simple - profit.  Automakers can make more money with higher profit margins on bigger vehicles, hence the switch to SUVs.  (Sound familiar?)  Also, the European carmakers are concentrating more on high-end models and brands, trying to make more money by selling fewer vehicles - at a time when the cost of living is going up in Europe and people need cars that are less expensive as well as more fuel-efficient.  Poliscanova also reports that the average weight of a European car has increased by 100 kilograms - that's 220 pounds, folks! - and the dimensions of the average European car has increased by 6 percent between 2012 and 2022, and with the price of a sport utility vehicle 60 percent higher than a car, companies such as BMW, Volkswagen and Stellantis  enjoyed a 15 to 30 percent growth in profits in 2021, even with the delta corona and supply-chain issues getting in the way.   

And Poliscanova says that getting rid of small cars in favor of this, er, American-style business model is bad for just about everyone.  Everyone.  "[E]xiting smaller car segments is not good news for the environment, drivers or the European industry," she wrote. "Larger cars put more pressure on the planet as they need more material to be built and more energy, be it oil or electricity.  Four Tesla Model 3s (standard range) can be made from the 200-kWh battery pack of a GMC Hummer EV.  For drivers, this means more expensive models and higher running costs, especially at a time of high energy prices.  Large cars, rather than electric, are expensive: a one-tonne (2,205-lb) electric model costs around €20,000 (US$21,532), whereas a two-tonne (4,409-lb) one comes with a price tag of €45,000-60,000 (US$48,445 to 64,593). . ..  Ultimately, Western carmakers might come to regret this.  While they can make more profit on every SUV sold, the small-car segment is where the volume is."

And who in Europe is ready to satisfy that demand?   The Chinese.  A few Chinese brands and some European brands owned by Chinese companies are ready to pounce and deliver cars for the small-car segment to the detriment of Volkswagen or Renault just as the Japanese ability to respond to a sudden demanded from small cars in the U.S. was to the detriment of Detroit in the early seventies.

Poliscanova makes a couple of points I've been making all along, most notably that bigger vehicles - even electric ones - are more harmful to the environment because of the extra materials and energy involved, but in their quest to make more euros, European automakers have proven to be just as shortsighted as Detroit.  Either give the people what they want or give the people what they think they want.

Meanwhile, I think I can say goodbye to the idea of renting one of those cute, cool little city cars if I ever get to Europe - and I actually have the opportunity to go as early as next year (unless Trump gets back in power and doesn't allow anyone to leave the country).  Ultimately, if I do make it abroad, if I want to get around the Old Country, I'll probably be better off taking the train.

Hey, I got no problem with that!