Buyers Moving to Compacts; Midsize Cars Suffer

Compact cars — like the Nissan Versa and Honda Fit — saw their market share leap 4% to 31.2% in 2006, according to J.D. Power. That one-year spike followed a more gradual increase of 4% over the previous five years for the segment. This is big news as more compact cars are coming to market with more standard convenience and safety features, like the new Suzuki SX4.

This gain comes at the expense of midsize cars, as the market share for that dominant segment fell from 42.8% to 40.4%. Popular midsize cars include the Honda Accord, Toyota Camry and Ford Fusion.

Today's news is significant because U.S. automakers make less money on compact cars than import brands do, and they've failed to develop popular new models to compete with Japanese and Korean brands.

Another common belief was that people who bought a compact car eventually moved up to purchase larger cars. That's not the case, according to the new study: 56.4% of compact-car owners buy another compact car as their next vehicle, up from 51% in 2005.

It's important to note that J.D. Power combines what we consider compact cars — like the Versa — with compact SUVs like the Honda CR-V and BMW X3 under one "compact" umbrella. That said, those basic compact, non-SUV cars still make up most of the overall segment, according to J.D. Power.

Source: J.D. Power

Comments

I myself am looking to downsize to a compact. My Mazda6 is starting to feel old and that new Mazdaspeed3 has caught my eye. I'll save a bit more on gas, have some decent utility and look good doing it!

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