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Small Cars - US - June 2011

This report covers sales and leases of new cars by new car dealerships to consumers. Crossover vehicles are not included in this report, nor are sales of used small cars. The small car market is divided into three segments by Mintel:

Lower-tier small cars typically run less than 170 inches in length and have a 2011 base MSRP between $12,500 and $15,000. Examples of cars of this type currently on the market include the Chevrolet Aveo, Kia Rio, and the Honda Fit.

Upper-tier small cars typically run between 170 and 180 inches in length with a 2011 base MSRP between $14,500 and $16,000. The Nissan Sentra, Volkswagen Golf, and Ford Focus fall into this category.

Specialty-tier small cars, a segment that includes two-seat vehicles, hybrids/electrics, and design-focused vehicles, is also measured here. Specialty compacts consist of vehicles in the $18,000-32,000 range. The BMW Mini Cooper, Volkswagen’s New Beetle, and the Nissan Leaf are prime examples of cars in this category.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                      • Small cars gain share through the recession
                        • In the face of high fuel prices, small cars offer all-around savings
                          • All three segments see dramatic growth in Q1 2011
                            • Wider market shifts toward efficient vehicles
                              • Moving to a small car culture: Incentivizing consumers to buy small
                                • Japanese earthquake shakes up supply chain
                                  • Competition from other segments necessitates a shift in focus
                                    • Upper-tier models dominate small car sales, but smaller might become big
                                      • Moving away from the econo-box to a focus on style
                                        • Hyundai takes lead in small car sales
                                          • Marketing the car that’s right for the driver
                                            • Moving ahead with fuel-efficiency in hopes the consumer catches up
                                              • Americans historically prefer larger vehicles
                                                • Vast majority utilizing small car as primary vehicle
                                                  • Potential for growth seen in future consideration
                                                    • Urbanites more small car friendly
                                                    • Insights and Opportunities

                                                      • Go beyond the miles
                                                        • Making the purchase process an enjoyable one
                                                          • Interactivity beyond the purchase
                                                          • Inspire Insights

                                                              • Inspire Trend—“Attention Economy”
                                                              • Market Size and Forecast

                                                                • Key points
                                                                  • Small cars outperform rest of industry
                                                                      • Figure 1: Total U.S. new small cars sold/leased, 2006-13
                                                                  • Market Drivers

                                                                    • Gas prices fuel shift
                                                                      • Figure 2: U.S. gasoline national average price per gallon, 2006- 2011
                                                                    • Consumer response to high prices
                                                                      • Cheaper credit
                                                                        • Wider market shifts toward efficient vehicles
                                                                          • CAFE: New regulations challenge industry to sell more small cars
                                                                            • CAFE standards create need on supply side to sell small cars
                                                                              • Consumer subsidies down, but manufacturers now on the dole
                                                                                • Moving to a small car culture: Incentivizing consumers to buy small
                                                                                  • Japanese earthquake and tsunami
                                                                                    • Macroeconomics: A mixed outlook promotes lower-tier sales
                                                                                      • Figure 3: Employment status, population 16 years and older, 2000-10
                                                                                    • Consumer confidence on the rise
                                                                                      • Disposable income up, but consumers still cautious
                                                                                        • Figure 4: Disposable personal income and personal consumption, 2005-10
                                                                                        • Figure 5: Attitudes toward discretionary spending, by household income, October 2010
                                                                                    • Competitive Context

                                                                                      • Key points
                                                                                        • Competition from larger new vehicles
                                                                                          • Figure 6: Small car sales and share of all cars and all automobiles, 2006-2010
                                                                                        • In good times and bad…
                                                                                          • Price comparison
                                                                                            • Figure 7: Pricing on best-selling small cars, 2008-10
                                                                                          • Competition from used vehicles
                                                                                            • Figure 8: Trade-in values of popular small cars, May vs. June 2011*
                                                                                        • Market Segmentation

                                                                                          • Key points
                                                                                            • Lower tier making market share gains
                                                                                                • Figure 9: U.S. sales of new compact cars, by segment, 2009 vs. 2010
                                                                                                • Figure 10: U.S. sales of new compact cars, by segment, 2010-2011
                                                                                                • Figure 11: U.S. sales of new compact cars by segment, 2006-13
                                                                                            • Segment Performance—Upper Tier

                                                                                              • 2011 sales rosy in largest small car segment
                                                                                                • Figure 12: U.S. sales of upper-tier new compact cars, 2006-13
                                                                                            • Segment Performance—Lower Tier

                                                                                              • Lower tier on the move
                                                                                                • Figure 13: U.S. sales of lower-tier new compact cars, 2006-2013
                                                                                            • Segment Performance—Specialty Tier

                                                                                              • Specialty-tier rise in 2011 bodes well for new releases
                                                                                                • New specialty vehicles coming to market
                                                                                                  • Figure 14: U.S. sales of specialty-tier new compact cars, 2006-2013
                                                                                              • Leading Cars

                                                                                                • Overview
                                                                                                  • Figure 15: Sales of new small cars, by brand and model, 2010-2011
                                                                                                • Kia models post strong gains in share
                                                                                                  • Figure 16: Best-selling small vehicles, 2010-11
                                                                                                • Toyota
                                                                                                  • The road ahead: A small car Prius
                                                                                                    • Honda
                                                                                                      • Ford
                                                                                                        • Hyundai
                                                                                                          • Nissan
                                                                                                            • General Motors
                                                                                                              • The road ahead
                                                                                                                • What happened to the Smart car?
                                                                                                                • Marketing Strategies

                                                                                                                  • Automakers engaged in aggressive marketing to spark consumer demand
                                                                                                                    • Figure 17: Small car advertising expenditures, 2008-09
                                                                                                                  • Marketing themes
                                                                                                                    • Digital media
                                                                                                                      • Automaker websites
                                                                                                                        • Toyota
                                                                                                                          • Figure 18: Prius Goes Plural, May 2011
                                                                                                                        • Honda
                                                                                                                          • Ford
                                                                                                                            • Figure 19: Ford homepage, May 2011
                                                                                                                          • Hyundai
                                                                                                                            • Kia
                                                                                                                              • Nissan
                                                                                                                                • GM
                                                                                                                                  • Social media
                                                                                                                                    • Ford’s Spokespuppet a hit
                                                                                                                                      • Honda responds to love with more love
                                                                                                                                        • Online videos
                                                                                                                                          • Hyundai gets aggressive
                                                                                                                                            • Television advertising
                                                                                                                                              • Mini Cooper’s rally
                                                                                                                                                • Figure 20: Mini (Mini Cooper) ad, 2010
                                                                                                                                              • Mazda hawks individuality
                                                                                                                                                • Figure 21: Mazda 3 ad, 2011
                                                                                                                                              • Hyundai offers legroom
                                                                                                                                                • Figure 22: Hyundai Elantra ad, 2010
                                                                                                                                            • Innovations and Innovators

                                                                                                                                              • Making fuel-efficiency even more efficient
                                                                                                                                                • Tech firm algorithms to provide more relief at pump
                                                                                                                                                  • Everyone gets in on the market
                                                                                                                                                    • Nontraditional vehicles explore nontraditional markets
                                                                                                                                                    • Household Ownership

                                                                                                                                                      • One in eight households own a small car
                                                                                                                                                        • Figure 23: Compact car ownership, upper tier vs. lower tier, 2006-10
                                                                                                                                                    • Recent Purchase of a Small Car

                                                                                                                                                      • Key points
                                                                                                                                                        • Life transitions, parent purchases for teens, help to drive sales
                                                                                                                                                          • Figure 24: Types of car purchased in past 24 months*, by age, January 2011
                                                                                                                                                          • Figure 25: Types of car purchased in past 24 months*, by household size, January 2011
                                                                                                                                                      • Factors Influencing Small Car Purchases

                                                                                                                                                        • Key points
                                                                                                                                                          • Practicality drives purchases
                                                                                                                                                              • Figure 26: Factors affecting purchase decision for small cars, by gender and age, January 2011
                                                                                                                                                              • Figure 27: Factors affecting purchase decision for small cars, by size of household, January 2011
                                                                                                                                                          • Segment Owned/Planned to Purchase

                                                                                                                                                            • Key points
                                                                                                                                                              • Larger compacts rule, but interest in subcompacts and microcars growing
                                                                                                                                                                • Figure 28: Type of small cars owned, by age, January 2011
                                                                                                                                                                • Figure 29: Type of small car planned for purchase, by gender, January 2011
                                                                                                                                                            • How Small Cars are Used

                                                                                                                                                              • Key points
                                                                                                                                                                • For most small car owners, the small car is the primary vehicle
                                                                                                                                                                  • Figure 30: Compact cars as primary or secondary vehicle, January 2011
                                                                                                                                                                  • Figure 31: Role of compact car in future purchase, January 2011
                                                                                                                                                                • City driving
                                                                                                                                                                  • Figure 32: Usage for local/city driving among compact car drivers, by gender, January 2011
                                                                                                                                                              • Interest in Future Purchase of a Small Car

                                                                                                                                                                • Key points
                                                                                                                                                                  • Nearly half would consider purchasing a small car in the future
                                                                                                                                                                    • Figure 33: Future interest in purchasing a small car, by gender, January 2011
                                                                                                                                                                    • Figure 34: Future interest in purchasing a small car, by age, January 2011
                                                                                                                                                                    • Figure 35: Future interest in purchasing a small car, by household income, January 2011
                                                                                                                                                                    • Figure 36: Future interest in purchasing a small car, by household size, January 2011
                                                                                                                                                                    • Figure 37: Future interest in purchasing a small car, by presence of children, January 2011
                                                                                                                                                                • Reasons for Not Purchasing a Small Car

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Size, safety, and horsepower most-cited reasons
                                                                                                                                                                      • Figure 38: Reasons for not purchasing a small car, by gender, January 2011
                                                                                                                                                                      • Figure 39: Reasons for not purchasing a small car, by age, January 2011
                                                                                                                                                                      • Figure 40: Reasons for not purchasing a small car, by household income, January 2011
                                                                                                                                                                      • Figure 41: Reasons for not purchasing a small car, by household size, January 2011
                                                                                                                                                                  • Race and Hispanic Origin

                                                                                                                                                                      • Figure 42: Types of car planed for purchase in next 24 months, by race and Hispanic origin, January 2011
                                                                                                                                                                      • Figure 43: Types of car purchased in past 24 months, by race and Hispanic origin, January 2011
                                                                                                                                                                  • Cluster Analysis

                                                                                                                                                                      • We’ve Got One, Thanks!
                                                                                                                                                                        • Demographics
                                                                                                                                                                          • Characteristics
                                                                                                                                                                            • Opportunity
                                                                                                                                                                              • Switchers and Sharers
                                                                                                                                                                                • Demographics
                                                                                                                                                                                  • Characteristics
                                                                                                                                                                                    • Opportunity
                                                                                                                                                                                      • This One’s for Me
                                                                                                                                                                                        • Demographics
                                                                                                                                                                                          • Characteristics
                                                                                                                                                                                            • Opportunity
                                                                                                                                                                                              • Cluster characteristics
                                                                                                                                                                                                • Figure 44: Proportion of clusters in recent/future car purchasers, April 2011
                                                                                                                                                                                                • Figure 45: Type of car purchased in past 24 months, by clusters, April 2011
                                                                                                                                                                                                • Figure 46: Intent to purchase a vehicle in next 24 months, by clusters, April 2011
                                                                                                                                                                                                • Figure 47: Factors affecting purchase decision for small cars, by clusters, April 2011
                                                                                                                                                                                                • Figure 48: Type of small car owned, by clusters, April 2011
                                                                                                                                                                                                • Figure 49: Type of small car intended for purchase, by clusters, April 2011
                                                                                                                                                                                                • Figure 50: Compact cars as primary or secondary vehicle, by clusters, April 2011
                                                                                                                                                                                                • Figure 51: Future compact car purchase as primary or secondary vehicle, by clusters, April 2011
                                                                                                                                                                                                • Figure 52: Usage for local/city driving among compact car drivers, by clusters, April 2011
                                                                                                                                                                                              • Cluster demographics
                                                                                                                                                                                                • Figure 53: Clusters, by gender, April 2011
                                                                                                                                                                                                • Figure 54: Clusters, by age, April 2011
                                                                                                                                                                                                • Figure 55: Clusters, by household income, April 2011
                                                                                                                                                                                                • Figure 56: Clusters, by race, April 2011
                                                                                                                                                                                                • Figure 57: Clusters, by Hispanic origin, April 2011
                                                                                                                                                                                              • Cluster methodology
                                                                                                                                                                                              • Custom Consumer Groups

                                                                                                                                                                                                • Key points
                                                                                                                                                                                                  • Analysis by type of compact owned
                                                                                                                                                                                                      • Figure 58: Number of vehicles in household, by type of compact owned, October 2009-December 2010
                                                                                                                                                                                                    • Planned compact car purchases among current compact car owners
                                                                                                                                                                                                        • Figure 59: Next vehicle purchase new or used, by type of compact car owned, October 2009-December 2010
                                                                                                                                                                                                        • Figure 60: Next vehicle purchase new or used, by type of compact car owned, October 2009-December 2010
                                                                                                                                                                                                        • Figure 61: Next vehicle purchase by premium compact car owners with plans to purchase a new/used vehicle, by type of compact car owned, October 2009-December 2010
                                                                                                                                                                                                      • Urbanites vs. suburbanites
                                                                                                                                                                                                          • Figure 62: Factors affecting purchase decision for small cars, urbanites vs. suburbanites, January 2011
                                                                                                                                                                                                          • Figure 63: Reasons for not purchasing a small/compact vehicle, urbanites vs. suburbanites, January 2011
                                                                                                                                                                                                      • Appendix—Other Useful Consumer Tables

                                                                                                                                                                                                          • Figure 64: Compact car ownership, foreign vs. domestic, 2006-10
                                                                                                                                                                                                          • Figure 65: Types of car purchased in past 24 months, by household income, January 2011
                                                                                                                                                                                                      • Appendix—Trade Associations

                                                                                                                                                                                                        Companies Covered

                                                                                                                                                                                                        • Alliance Of Automobile Manufacturers, Inc.
                                                                                                                                                                                                        • American Automobile Association (AAA)
                                                                                                                                                                                                        • Audi of America Inc
                                                                                                                                                                                                        • Automotive Industry Action Group (AIAG)
                                                                                                                                                                                                        • Automotive Trade Association Executives (ATAE)
                                                                                                                                                                                                        • BMW of North America, LLC
                                                                                                                                                                                                        • Chrysler LLC
                                                                                                                                                                                                        • Daimler AG
                                                                                                                                                                                                        • Ford Motor Company (USA)
                                                                                                                                                                                                        • General Motors Corporation
                                                                                                                                                                                                        • Google, Inc.
                                                                                                                                                                                                        • Honda Motor Co., Ltd
                                                                                                                                                                                                        • Hyundai Motor America
                                                                                                                                                                                                        • Kia Motors America, Inc.
                                                                                                                                                                                                        • Mercedes-Benz USA
                                                                                                                                                                                                        • Mitsubishi Motors North America, Inc.
                                                                                                                                                                                                        • Motor Press Guild (MPG)
                                                                                                                                                                                                        • National Automobile Dealers Association (NADA)
                                                                                                                                                                                                        • Nissan North America, Inc.
                                                                                                                                                                                                        • Society of Automotive Analysts (SAA)
                                                                                                                                                                                                        • Suzuki Motor Corporation
                                                                                                                                                                                                        • Toyota Motor Corporation USA
                                                                                                                                                                                                        • Volkswagen AG
                                                                                                                                                                                                        • Volkswagen of America, Inc.

                                                                                                                                                                                                        Small Cars - US - June 2011

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