Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- The market
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- 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
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- 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
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- 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
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- 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
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- 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
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- Figure 6: Factors motivating small car purchase, by gender, June 2012
- Respondents concerned most about safety, cargo capability of small cars
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- Figure 7: Concerns with small cars, by gender, June 2012
- Asian respondents most likely to say they own/lease a small vehicle
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- 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
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- Figure 9: Factors motivating purchase of a small car, by race/Hispanic origin, June 2012
- What we think
Issues in the Market
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- 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
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- 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
Trend Application
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- Inspire trend: Immaterial World
- Inspire trend: The Nouveau Poor
- Inspire 2015 trends
- East Meets West
Market Size and Forecast
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- Key points
- Small cars undergo quality transformation, which grows unit sales
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- Figure 10: Total U.S. unit sales and forecast of new small cars, 2007-17
- Small cars represented 35% of total car sales in 2011
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- Figure 11: Small cars as a share of all cars sold and all automobiles sold, 2007-11
- Fan chart forecast
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- Figure 12: Fan Chart forecast of U.S. unit sales of small cars, 2007-17
Market Drivers
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- New fuel efficiency standards alter future landscape of small car buying
- Potential higher EV/PHEV sales threaten small car market
- Rising fuel costs make fuel-efficient small cars more attractive
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- Figure 13: Average U.S. regular gas price, 36-month average, Sept 2012
- Poor consumer sentiment may threaten new car buying
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- Figure 14: University of Michigan Consumer sentiment, 1978-2012
- Small cars redesigned as better equipped, distinctive vehicles
Segment Performance—Overview
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- Key points
- Upper Tier vehicles dominate small car market
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- Figure 15: Total U.S. unit sales of new compact cars, by segment, 12 months ending June 2011 and June 2012
- Majority of entry compact owners spent between $15,000 and $19,000
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- Figure 16: Total amount spent on purchase or lease of vehicle, by entry compact and premium compact owners, January 2011-March 2012
Segment Performance—Upper Tier
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- Key points
- Compact vehicles offer consumers roominess, comfort
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- Figure 17: Total U.S. unit sales of new upper tier vehicles, 2007-17
Segment Performance—Lower Tier
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- Key points
- Recession drives gains in Lower Tier vehicles
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- Figure 18: Total U.S. unit sales of new lower tier vehicles, 2007-17
Segment Performance—Specialty Tier
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- Key points
- Personality drives Specialty Tier segment
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- Figure 19: Total U.S. unit sales of new specialty tier vehicles, 2007-17
Leading Small Cars
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- Key points
- Japanese brands rebound from supply shock following earthquake
- Majority of Toyota unit sales growth in Lower Tier segment
- Majority of Honda sales in Upper Tier segment
- Fiat gains based on launch of the Fiat 500
- Domestic automakers revitalized by small vehicle focus
- Chevy Cruze becomes GM’s top-selling car
- Ford offers SYNC connectivity in small vehicle lineup
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- Figure 20: Small vehicle sales and market share by manufacturer, YTD July 2011 and YTD July 2012
- Civic overtakes Corolla to become best-selling small car
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- Figure 21: Top 10 best-selling small cars, YTD July 2011 and YTD July 2012
Innovation and Innovators
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- Fiat announces upscale coffeemaker option for 2013 Fiat 500L
- Honda markets EV version of subcompact Fit with free insurance
- Scion emphasizing iQ technology through PlayStation giveaway
- Cadillac launches inaugural small car model to expand luxury market
- Chevrolet emphasizes trust in exchange, no-haggling promotions
Marketing Strategies
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- Strategy: Using multiple platforms to relaunch, freshen vintage brand
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- Figure 22: Dodge Dart ReverbNation contest, July 2012
- Figure 23: Dodge Dart Soldier Field “Dealer Drive Away” event, June 2012
- Strategy: Targeting Millennial buyers through game-oriented campaign
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- Figure 24: Toyota Prius c website, July 2012
- Figure 25: Toyota The Game of LIFE campaign, July 2012
- Strategy: Emphasize the underdog value of being small
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- Figure 26: Mini “Win Small” campaign, July 2012
- Strategy: Create stealth viral campaign online to reach Millennials
- Strategy: Using humor to make small cars appealing to Millennial buyers
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- Figure 27: God of Okay Scion ad, October 2011
- Strategy: Using visual perspective to show that small is relative
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- Figure 28: Mini “Let’s Ride” ad, October 2011
- Strategy: Use spectator footage to make small car look dangerous
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- Figure 29: Ford Focus Spectator ad, July 2012
Small Car Ownership and Plans to Purchase
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- Key points
- Majority of respondents do not own or lease a small car
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- Figure 30: Small car ownership and plans to purchase, by gender, June 2012
- Those aged 45-54 most likely to show interest in purchasing small car
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- Figure 31: Small car ownership and plans to purchase, by age, June 2012
- Respondents from households earning $75K-99.9K most interested in small cars
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- Figure 32: Small car ownership and plans to purchase, by household income, June 2012
- Singles, married most likely to say they currently own small car
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- Figure 33: Small car ownership and plans to purchase, by marital/relationship status, June 2012
Familiarity with Small Car Brands
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- Key points
- Respondents most aware of heritage small car/compact models
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- Figure 34: Familiarity with specific small car brands, by gender, June 2012
- Oldest respondents least familiar with listed small car/compact brands
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- Figure 35: Familiarity with specific small car brands, by age, June 2012
- Respondents from wealthiest households most familiar with top brands
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- Figure 36: Familiarity with specific small car brands, by household income, June 2012
Attributes Associated with Small Cars
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- Key points
- Majority respondents attribute small cars as “practical,” “thrifty”
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- Figure 37: Attributes associated with specific brands of small cars, June 2012
- Kia Soul associated most with “practical,” “thrifty,” “fun”
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- Figure 38: Attributes associated with specific brands of small cars, June 2012 (continued)
- Fiat 500 considered “cute,” “fun,” “stylish”
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- Figure 39: Attributes associated with specific brands of small cars, June 2012 (continued)
Factors Motivating Small Car Purchase
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- Key points
- High miles per gallon prime motivator to purchase small cars
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- Figure 40: Factors motivating small car purchase, by gender, June 2012
- High miles per gallon a prime motivator for those aged 18-24
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- Figure 41: Factors motivating small car purchase, by age, June 2012
- Middle-income households most likely motivated by high miles per gallon
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- Figure 42: Factors motivating small car purchase, by household income, June 2012
- Rising gas prices a factor for most respondents living with a partner
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- Figure 43: Factors motivating small car purchase, by marital/relationship status, June 2012
Concerns with Small Cars
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- Key points
- Respondents concerned most about safety, cargo capability of small cars
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- Figure 44: Concerns with small cars, by gender, June 2012
- Respondents aged 45+ most concerned about safety of small cars
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- Figure 45: Concerns with small cars, by age, June 2012
- Respondents from wealthiest households most concerned about safety
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- Figure 46: Concerns with small cars, by household income, June 2012
- Married, divorced/separated respondents most concerned about safety
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- Figure 47: Concerns with small cars, by marital/relationship status, June 2012
- Those planning to purchase more likely to be concerned about value
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- Figure 48: Concerns with small cars, by ownership of and interest in owning a small car, June 2012
Engine Size Preference for Small Cars
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- Key points
- Female respondents less clear than men about ideal engine size
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- Figure 49: Engine size preference for small cars, by gender, June 2012
- Those aged 35-44 most likely to prefer 3-3.49 and 4.0+ liter engine sizes
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- Figure 50: Engine size preference for small cars, by age, June 2012
Number of Doors Preferred in a Small Car
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- Key points
- Majority of respondents envision driving small cars with four doors
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- Figure 51: Number of doors preferred in a small car, by gender and age, June 2012
- Four-door small cars preferred most by suburban respondents
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- Figure 52: Number of doors preferred in a small car, by urban status, June 2012
Preferred Features for Small Cars
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- Key points
- Roominess, cargo utility, and accessibility top preferred features
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- Figure 53: Preferred features for small cars, by gender, June 2012
- When respondents reach 35+ utility/room becomes more important
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- Figure 54: Preferred features for small cars, by age, June 2012
- Respondents from $100K+ households most prefer GPS, stereo
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- Figure 55: Preferred features for small cars, by household income, June 2012
- Married respondents most likely to prefer roominess as “must have”
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- Figure 56: Preferred features for small cars, by marital/relationship status, June 2012
- Suburban respondents most likely to prefer roominess as “must have”
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- Figure 57: Preferred features for small cars, by area, June 2012
Automaker Most Likely to Make a Respectable Small Car
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- Key points
- For the majority of respondents Honda most likely to build respectable small car
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- Figure 58: Automaker most likely to make a respectable small car, by gender, June 2012
- For respondents aged 65+ preference even among Honda, Ford, Toyota
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- Figure 59: Automaker most likely to make a respectable small car, by age, June 2012
- Preference for Honda increases as household income rises
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- Figure 60: Automaker most likely to make a respectable small car, by household income, June 2012
Features Owned by Compact Vehicle Owners
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- Key points
- Entry compact owners most likely to have airbags, service contract
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- Figure 61: Features in respondent’s vehicles, by entry compact and premium compact owners, January 2011-March 2012
Future Auto Purchase Plans of Compact Vehicle Owners
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- Key points
- More than half of compact owners say households considering car purchase
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- Figure 62: Type of vehicle considering for next vehicle purchase, by entry compact and premium compact owners, January 2011-March 2012
- Entry compact owners uncertain about type of vehicle
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- Figure 63: Origin of next vehicle considering for future purchase, by entry compact and premium compact owners, January 2011-March 2012
- Entry compact owners most likely to plan purchase 4+ years from now
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- Figure 64: When next vehicle will be bought, by entry compact and premium compact owners, January 2011-March 2012
Impact of Race and Hispanic Origin
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- Key points
- Asian respondents most likely to say they own/lease a small vehicle
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- Figure 65: Small car ownership and plans to purchase, by race/Hispanic origin, June 2012
- Honda Civic, Toyota Corolla most familiar to Asian respondents
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- Figure 66: Familiarity with small car brands, by race/Hispanic origin, June 2012
- Rising gas prices most likely to motivate white, Hispanic respondents
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- Figure 67: Factors motivating purchase of a small car, by race/Hispanic origin, June 2012
- White respondents most likely to agree that small cars are not as safe
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- Figure 68: Concerns with small cars, by race/Hispanic origin, June 2012
- White, black respondents most likely to not know ideal engine size
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- Figure 69: Ideal engine size for a small car, by race/Hispanic origin, June 2012
- White respondents most likely to say roominess, easy access ideal
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- Figure 70: Must have features for a small car, by race/Hispanic origin, June 2012
- Asian respondents feel Honda, Toyota ideal to build respectable small car
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- Figure 71: Manufacturer considered most likely to make a respectable small car, by race/Hispanic origin, June 2012
Appendix
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- Factors motivating small car purchase and region
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- Figure 75: Factors motivating small car purchase, by urban status, June 2012
- Engine size preference for small cars
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- Figure 76: Engine size preference for small cars, by household income, June 2012
- Figure 77: Engine size preference for small cars, by urban status, June 2012
- Automaker most likely to make respectable small car
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- Figure 78: Automaker most likely to make a respectable small car, by marital/relationship status, June 2012
- Figure 79: Automaker most likely to make a respectable small car, by ownership of, and interest in, owning a small car, June 2012
Appendix—Trade Associations
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