Friday, May 12, 2006

Random thoughts on new small cars, B and C segment entries

Like a lot of people over the last few months I've been squawking non stop about the need for new entry level cars that achieve better fuel economy and would be more affordable. The B-Segment cars available in many overseas markets. Cars like Toyota's Yaris, Honda's Fit and Ford's Fiesta. And this week there's quite a bit of information about these new entries online and in print. Online Robert Farago of the The Truth About Cars reviews the new Yaris and it's a good read.
Of course Mr Farago, can't resist flinging mud at the Pinto. Aparently he wasn't too happy with his first car and like many journalists print or otherwise, will not let the Big 3 forget the sins of the past. And while I liked my Pinto, that's probably a good thing. Ford can't afford to go at this half assed. Any new product needs to be their "A" game, even if it is a B Segment.
And I've said it before Ford has the car they need to compete in this segment, a world class entry that has a proven track record. And with spin offs of this chassis that cover more than just the 3/5 door as I've pointed out before. But what about the "C" segment? More on that below.
While some of the new models coming are B Segment, it has become clearer to me that not all are. Now I'm reading the term "C" segment, especially in regards to Nissan's Versa. But in the B Segment, expect the Honda Fit to dominate with it's excellent packaging and high quality. But in Europe and other markets, Ford goes head to head very well with the Fiesta.
So I guess the "C" segment is another way of saying Compact, which of course every manufacturer already has product in place. But the trend is to bring prices down in this segment. Now it's no secret that I want the C-1 Focus to come to the US, and based on my recent purchase of it's sibling Mazda3, I know it can be sold competatively, but I'm getting ahead of myself.
Volkswagen's reintroduction of the Rabbit, with lower content and price is one that caught me by surprise, and I think will bring back core customers to VW. But these C-Segment models aren't as fuel efficient as their B-Segment competitors, especially when you factor in the Honda Fit Hybrid that will eventually come to market. In fact the only one that will be a real economy achiever will be VW's TDI Rabbit.
But the biggest surprise for me was the new Nissan Versa. I had read that it was a new B-Segment model, but it's really just a rebadged Renault Megane, a C segment model in size and economy. I guess the Sentra is moving up in size and price. The Versa will have a base price around $12k, less than even the Honda Fit, but it's Focus sized and only gets 32 mpg.

So now I've got to organize my thoughts more clearly. In the B segment we will have the Fit, Yaris and Aveo all achieving 40 mpg, but the Honda will be priced closer to the larger C segment cars? Chrysler has brought out the new Caliber to replace the Neon and fill their C slot with a base price around $13,500 it's very close to the Yaris and Versa, but so is the existing Focus. The Focus C170 US version has a base price of $14k for the 3 door and with discounts the price is right there. And the Focus with the 2.0 L achieves 34 mpg, not really that far off the B segment models. So it seems that the "bottom" of the market is getting more confusing. If you're looking for low price, there are options. If you're looking for higher milage there are options also. And of course if you want both low price and better milage there are options, but not as clear.

The best for economy will be the VW Rabbit with the TDI Diesel and the upcoming Honda Fit Hybrid, but neither will be below $17k by my estimate. And if you're just shopping price, the Focus is still a viable option, as are the Versa, Yaris and Aveo. I'm still thinking that Ford should bring the Fiesta here and move the Focus up a little when they bring the C1 here, but it may have been a smart move on their part to delay until 2008/2009. Only time will tell, but it's going to be interesting how these new models shake out.


Shawn said...

You & I differ on this...I have doubts about the small car market in the US. Maybe it'll sell well for awhile, but I don't see it as a lasting trend. (I can be wrong of course).

I think a reworked, re-styled and more powerful Focus can do well here.

Far more likely is that the SUV driving public will go back to large cars. Ford needs to address the Crown Vic, Mercury, Lincoln cars more urgently.

...but that's just me

Big Ford Fan said...

Shawn, you may be right. But if Honda sells 60,000 Fit and Nissan sells as many Versa and Toyota sell at least 40,000 Yaris, don't you think Ford could sell 50,000 small cars? I think they could and for every customer that comes in to see these small cars, maybe one in ten will buy the larger Focus? Ford needs to bring a B segment car to market in US and bring the new Focus C1 here also.

The SUV driving public is going to shrink if gas prices stay above $3