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The US Small Car Market - September 2012

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This report explores the small car market in the U.S. It provides insight into the external and internal factors affecting unit sales and what they mean for future sales, marketing and promotional campaigns, and industry innovations. It provides an in-depth examination of the small car market for automakers, dealerships, and marketers interested in pursuing opportunities to innovate trends within segments and to evaluate the competition.

Segmentation data and analysis covers three segments: Upper Tier, Lower Tier and Specialty Tier vehicles....


The Upper Tier segment represents the biggest segment in unit sales, however greater growth is shown in the Lower Tier and Specialty Tier segments with their smaller frames and greater fuel efficiency.

Rising gas prices and improved vehicle quality are driving consumers to small cars. These vehicles are no longer valued for their practicality but are being marketed more for their lifestyle component. This market picked up in 2011, when unit sales increased 12%, an increase that is expected to continue by the end of 2012. After remaining stable in 2013, this market is expected to pick up 15% in 2014. Between 2014-17, the small market is expected to grow 55.8% in unit sales.

The majority of all respondents to Mintel’s online survey (55%) neither own or lease a small car nor do they plan to buy one in the next six months or more. However, over one quarter (27%) currently own or lease a small car. Those respondents who are planning to purchase either in the next six months (3%) or more than six months hence (3%) is minimal. For automakers aiming to introduce new small car models, the best potential base is the 12% of consumers who do not currently own or lease a small car but are interested in purchasing one.

What's included in the US Small Car Market Report:

For the purposes of this report, Mintel considers the small car market as being for new vehicles only (not used), and has used the following segment definitions:

Lower Tier small cars typically run less than 170 inches in length and have a 2011 base MSRP between $12,500 and $16,000. 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 Beetle, and the Nissan LEAF are prime examples of cars in this category.

Companies Mentioned

AB Volvo
Alliance Of Automobile Manufacturers, Inc.
American Honda Motor Co., Inc.
Audi of America Inc
Automotive Aftermarket Industry Association
Automotive Industry Action Group (AIAG)
Automotive Oil Change Association (AOCA)
Automotive Trade Association Executives (ATAE)
BMW of North America, LLC
Chrysler LLC
Connected Vehicle Trade Association (CVA)
Facebook, Inc.
Fiat Auto
Ford Motor Company (USA)
Hasbro Inc
Jaguar Cars North America
Kia Motors America, Inc.
Major League Baseball
Mercedes-Benz USA
Mitsubishi Motors North America, Inc.
National Automobile Dealers Association (NADA)
National Independent Automobile Dealership Association (NIADA)
Nissan North America, Inc.
Porsche Cars North America, Inc.
Rubber Manufacturers Association (RMA)
Saab Cars North America
Suzuki Motor Corporation
Tire Industry Association
Toyota Motor Corporation USA
U.S. Bureau of Labor Statistics
U.S. Department of Transportation
U.S. Environmental Protection Agency
University of Michigan, The
Volkswagen of America, Inc.

Scope and Themes
What you need to know Definition Data sources Sales data Consumer survey data Abbreviations and terms Abbreviations Terms

Executive Summary
The market
Figure 1: Fan chart forecast of U.S. unit sales of small cars, 2007-17
Market factors New fuel efficiency standards alter future landscape of small car buying Rising fuel costs driving consumers to small cars
Figure 2: Average U.S. regular gas price, 36-month average, Sept 2012
Small cars redesigned to emphasize quality, technology, comfort Segmentation Market split into three segments based on vehicle size and price
Figure 3: Total U.S. unit sales of new compact cars, by tier, 12 months ending June 2012
The consumer Majority of respondents do not own or lease a small car
Figure 4: Small car ownership and plans to purchase a small car, June 2012
Those aged 45-54 most interested in owning/leasing small car
Figure 5: Small car ownership and plans to purchase a small car, by age, June 2012
High miles per gallon prime motivator to purchase small cars
Figure 6: Factors motivating small car purchase, by gender, June 2012
Respondents concerned most about safety, cargo capability of small cars
Figure 7: Concerns with small cars, by gender, June 2012
Asian respondents most likely to say they own/lease a small vehicle
Figure 8: Small car ownership and plans to purchase a small car, by race/Hispanic origin, June 2012
Rising gas prices most likely to motivate white, Hispanic respondents
Figure 9: Factors motivating purchase of a small car, by race/Hispanic origin, June 2012
What we think

Issues in the Market
Rising fuel prices helping consumers see value in small cars Automakers positioning small cars as upgrades, not downgrades Small cars infused with personality to attract hesitant Millennial buyers

Insights and Opportunities
Launch special-edition small car nameplate to target luxury buyers Target municipalities with small car fleets to help cut congestion Emphasize parking benefits of small cars to urban buyers

For more information kindly visit :
The US Small Car Market - September 2012


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