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, the sort of 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! 

Out Of Focus

Back in May, I wondered out loud on this blog whether the Ford Focus and Fiesta, still available in Europe, would return to the U.S. market, given the continuing increase in gas prices.  The short answer, regarding the Focus at least, is: It won't.  That's because the Focus is being discontinued in Europe in 2025.

Ford announced the news on June 22, adding that it doesn't know how to keep the German plant that makes the European Focus up and running once the car is axed.  Most of the 4,600 workers at the factory could be laid off, even as Ford plans to make more electric vehicles. "The reality of the industry," a Ford representative said, "is that the production of EVs will require fewer people."

That would be fine if an ID.3-like hatchback were in the works at Ford to replace the Focus.  Alas, Ford plans to make more EUVs, because, well, crossovers are gaining popularity in Europe too.

The Focus is on the way out.  The Fiesta is next. 😬

You Got Change For a 500?

I sort of figured this was going to happen.  Fiat is discontinuing its small, cute 500 retro car in North America after nearly a decade.

You might expect that I, as a fan of extremely small cars, am saddened by this news.  Actually, not at all.  Because while it's easy to assume that the discontinuation of the 500 in America is the result of cheap gasoline and a preference for large wagons, that, while partially correct, is hardly the whole story.  The truth of the matter is that the 500, for all its charm, was an unreliable car that consistently rated at the bottom of consumer-satisfaction surveys.  It only reminded Americans old enough to remember when the Fiat brand, which returned to the U.S. in 2011 after a 27-year hiatus, was last available here what lousy pieces of crap Fiats really are.  Also, a new generation of consumers now know how bad they are.

And get this - the 500 was actually Fiat's bestseller in this country!

When Italy's Fiat and the U.S. firm Chrysler merged in 2009, I had such high hopes for the new company.  The Chrysler Group would get new, sophisticated cars much nicer that what was in its Chrysler and Dodge lineups.  Fiat would return to America and get the chance to show how it had learned from its mistakes and was able to produce a quality car.  Also, Fiat's premium Alfa Romeo brand was coming back.  The return of Alfa Romeo turned out to be the only positive thing that resulted from Fiat and Chrysler joining forces.  Fiat-based Dodge and Chrysler models, like the Dodge Dart, flopped in the ten-day sales reports.  The company focused more on Jeeps and the newly created Ram light-truck brand as gas prices dropped and gas-guzzler sales rose.  And Fiat itself, rather than bringing to the States a full lineup of affordable family cars like Volkswagen or Toyota, only gave us the 500, silly crossover derivatives of the 500 and a 124 roadster that's actually a Mazda Miata.  Mainstream Fiats like the Panda and the Tipo never made it to these shores.  Not that their reliability would have been all that much better.

Rather, Fiat centered its U.S. lineup around the 500 and its spinoffs in an attempt to be the Italian equivalent of Mini, whose Mini Cooper model has been a fantastic success in the United States and has spun off a whole slew of derivatives like the Clubman and the Countryman.  Mini thrives because, contrary to popular wisdom, Americans will buy a small car if it is unique, well-appointed, and fashionable.  But it also has to be good, and Fiat's 500 never caught on like the superior Mini Cooper, which, despite some early reliability issues, has been continuously improved and remains a desirable, sporty little car.  With the similarly small 500, Fiat had the chance to make Americans fall in love with its own idea of a little retro vehicle, but the firm blew it.

I can't see Fiat lasting in the United States much longer the second time around.  When your bestselling vehicle is too unpopular to continue offering, it doesn't make sense to go on.  Its cars are so bad that even if gas prices hadn't come down after the Great Recession was over, the 500 still would have ultimately flopped and Fiat still would have regained its reputation as a joke of a car brand.  And the joke is this: The name Fiat officially stands for "Fabbrica Italiana di Automobili Torino," which means, "Italian Factory of Turin Automobiles."  What Fiat really stands for is, "Fix It Again, Tony!"