November 16th, 2005

Industry Develops New Small Cars

Consumers can expect to see a number of new, smaller cars on the market in 2006–2007, as automakers begin shifting toward development and production of more compact, fuel-efficient vehicles. The rise in gas prices is credited with prompting this trend.

As stated in an October article in Automotive News, sales of small cars are up 9.5 percent in the first nine months of 2005 compared with same period in 2004. This is just one reason automakers perceive their introduction of the new small cars to the United States as a good investment. In addition, because manufacturers already sell these vehicles in Japan, Europe, and South America, large amounts of money for product development or construction of assembly plants will not be needed.

Toyota will introduce a three-door hatchback sedan called the Yaris next spring. Originally launched in 1999, the first-generation Yaris was Toyota’s bestselling model in Europe and the 2000 European Car of the Year. Replacing the Echo, the car will be available with either a five-speed manual or four-speed automatic transmission.

“As Toyota’s most affordable passenger car, the Yaris will feature modern exterior styling and a surprising and upscale interior. It will be one of the most economic and youthful passenger cars Toyota has built,” said Jim Lentz, Toyota Division Group Vice President and General Manager.

Nissan has developed a new, smaller car of its own, the Versa. Smaller than the Sentra and about the size of the Ford Focus, both the five-door hatchback version, which will be available in May 2006, and the four-door sedan, which goes on sale in the fall, will be 2007 models. According to, the Versa is available in a standard six-speed manual, four-speed electronically controlled automatic with overdrive, or a version of Nissan’s Xtronic Continuously Variable Transmission. The price is estimated to start at about $12,000.

Honda’s contribution to the new small car market will be in the form of the Fit hatchback, which should be available next spring or summer. Honda’s Web site does not reveal much about its new vehicle, except to say that the car will be “small on the outside, big on the inside.”

honda fit

Honda’s Fit hatchback will be its contribution to the small car market next spring. Photo Credit: American HondaMotor Co., Inc.

Ford plans to unveil a small sport wagon based on the EcoSport, similar to the European Fiesta. It is expected in 2007.

While these major automakers are targeting the market for more compact vehicles, DaimlerChrysler has opted to go in a different direction by developing a slightly larger car. The new Dodge Caliber will come on the scene to compete with the Honda Civic, Ford Focus, and Toyota Corolla. The Caliber is a five-door hatchback and will replace the aging Dodge Neon. DaimlerChrysler’s Web site describes it as having “a sporty, coupe-like profile with the strength, stance, and functionality of an SUV.”

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