In a crippling recession, McMansions, Hummers, and supersize are jargon from the recent past.
But for the US automotive industry – damaged by foreign competition, rising gas prices, and hesitant consumers – “small” might be getting even smaller. Microcars loom large on the horizon, as many companies are investing in, or at least considering, lightweight, economical, and quirky vehicles that are most often associated with zigzagging down European side streets – not keeping pace with semi trucks as they barrel down US highways.
“The advantages are many: They’re inherently low-cost in terms of upfront costs, they’re very simple so they can be affordable, and they can be extremely energy-efficient,” says Christopher Borroni-Bird, director of advanced technology vehicle concepts at General Motors. Dr. Borroni-Bird is helping develop the Personal Urban Mobility and Accessibility (PUMA), a two-wheeled electric vehicle based on the Segway scooter.
“Because cities are struggling with how to provide people with personal mobility in general, there’s been a real need to come up with a creative solution,” he says.
Smaller than even subcompacts, the microcar is slowly trickling into the US market as automakers experiment with just how far American consumers will go in sacrificing power and luxury for a lighter car that costs less. The bankruptcy filings of General Motors and Chrysler are forcing US automakers into a new era of experimentation, where the right combination of unusual design and alternative power is the new paradigm of competitive edge.
It also helps the Obama administration in tightening up fuel emission standards. The president wants new vehicles to average 35.5 miles per gallon by 2016, compared with 25.3 m.p.g. in 2009.
Moving forward, automakers are retooling their production schedules to create vehicles meant to attract consumers who otherwise associated small with cheap. These rollouts include the Ford Fiesta and Chevrolet Cruze, both due to be released in early 2010, as well as hybrid versions of existing brands.
But those models, while small, look and feel like traditional automobiles. Microcars only come in extra-small sizes. And while safety concerns persist, the petite vehicles hold their greatest appeal for consumers who simply want to tool around the neighborhood or have a second car that is no less extravagant, or purposeful, than a shopping cart.
“The big bulky things seem out of tune and no longer seem relevant,” says Sheryl Connelly, a global consumer trends and futuring manager at Ford.
Ms. Connelly says the microcar phenomenon is comparable to what happened to bulky stereo systems this decade, having been trimmed to the dimensions of a stamp-sized iPod Shuffle.
“Small cars used to be thought of as entry-level cars, but I don’t think that is the mind-set today,” she says.
Smart USA, a division of Chrysler, was the first to debut a US microcar with the launch of the Fortwo, which rates 33 m.p.g. in the city and 41 m.p.g. on the highway, according to the US Environmental Protection Agency. In its inaugural year, sales reached about 25,000 units sold in 2008 and the company expects that number to hold steady this year. An electric version will launch in 2010 in only a few US cities, with expansion scheduled for 2012. Other microcars on the horizon are the Toyota iQ, Chrysler’s Fiat 500, and Volkswagen’s Up.
Chip Snowden, an education consultant in Wilmington, Del., purchased a Fortwo in March 2008 as a secondary vehicle. Familiar with the car from trips abroad, he says he reserved his own for familiar reasons: “We were looking for something that was inexpensive to operate, didn’t cost an arm and a leg to buy, and had good gas mileage.”
But once he got into the driver’s seat, Mr. Snowden says he was surprised “at how much fun it is to drive.”
“It’s a car that’s pretty agile,” he says. “It has more power than you might think. We got it up to 75 [m.p.h.] on the Interstate. That was one of the things that surprised us.”
Besides cars like the Fortwo there is an even smaller subset of microcars: neighborhood electric vehicles meant for controlled environments, such as military bases or college campuses. With these, drivers sacrifice speed (few can top 25 m.p.h.) for zero emissions and affordability. According to Rick Kasper, president of Global Electric Motorcars in Fargo, N.D., sticker prices range between $7,300 and $12,900 for vehicles he sells mainly to industrial campuses, military bases, or planned communities.
“The main advantage of our products is they are very optional ... with zero emissions, we can take them out on the street and also drive them indoors,” says Mr. Kasper.
Futurists tracking issues like growing urban congestion and environmental health say microcars will become part of the solution. GM’s Borroni-Bird says the PUMA, which has a top speed of 35 m.p.h. and weighs 300 pounds, will first become an easier fit in countries such as China, where densely packed cities are already populated by a variety of vehicles, including motorbikes, bicycles, and cars.
But in the US, he says, small, battery-powered vehicles such as PUMA will only become a reality if governments take the first step and create measures like dedicated lanes or encourage taxi companies to restock their fleets with the cars. But for the US, “that’s a ways out. A lot of it is finding a receptive visionary government that wants to be a leader in solving personal urban mobility,” Borroni-Bird says.
Even though these vehicles may improve the environment or urban gridlock, safety advocates worry that as cars shrink, the potential for fatalities in collisions increases.
“The government is mandating higher fuel [standards] but they haven’t repealed the law of physics, which are always in play,” says Russ Rader, spokesperson for the Insurance Institute for Highway Safety, a nonprofit group funded by auto insurers.
In April the institute released a study that reported the Toyota Yaris, Honda Fit, and Smart Fortwo all failed frontal crash tests with heavier, mid-sized vehicles. In these tests, the drivers suffered a high risk of head and leg injuries when traveling at 40 m.p.h. and after air bags inflated. Microcars fare much better in test crashes against a stationary barrier, but Mr. Rader says those tests do not necessarily tell the whole story because they tend to reflect collisions against vehicles of similar weight. Because microcars are so small, however, “just about everything you hit will be heavier than you are.”
He says consumers interested in fuel economy in addition to safety have options in the mid-size range, such as the Ford Fusion, which averages 40 m.p.g.
The very features that make microcars desirable are the ones that may, in the long run, limit their appeal. Jeff Schuster, executive director of global forecasting at J.D. Power and Associates, says battery-driven vehicles such as the PUMA or the Chrysler Peapod will have to increase their top speeds and features for consumers to respond favorably.
Mr. Schuster says this is why some of the companies are focusing on the “quirky appeal” of the cars instead of their efficiency. The front end of the Peapod, for example, is in the shape of a smile.
“It will take a special marketing campaign and a special consumer – someone has to be really drawn to the vehicle and the fact that these are even greener vehicles than the Ford Focus. Right now they’re limited,” he says.
Which is why Ford is the single major automaker that has chosen to sit out on micros, at least for the moment. The company sells the Ka, a two-seat micro, in Europe and Latin America, but has no plans to launch the car in the US anytime soon. The reason, according to Mark Schirmer, product communications manager at Ford, is there is not yet a demand.
“We’re not saying ‘no,’ ” says Mr. Schirmer. Instead the company is preparing for the US launch of the Fiesta, already a bestselling subcompact in Europe, in early 2010.
“Let’s see how the Fiesta does. We know that if we can’t build enough Fiestas, we’ll probably look into Ka,” he says. “There is a huge appetite for smaller so we’re heading that way.”