Sales of midsize cars shrink as buyers go smaller

Published 4:00 am Sunday, November 27, 2011

DETROIT — You can’t drive far in the U.S. without seeing a Toyota Camry, Honda Accord or Ford Fusion.

Midsize sedans have been America’s favorite cars for decades. That’s changing. More people are choosing small cars like the Chevrolet Cruze and even smaller ones like the Honda Fit because they’re worried about gas prices and car payments. There’s another reason, too: Small cars are no longer the cramped econoboxes of the 1980s and 1990s, and they have many of the same features as larger cars.

Compact cars will outsell midsize ones as early as this year, forecasts J.D. Power and Associates, a marketing information firm. That hasn’t happened in at least two decades.

Just five years ago, automakers sold nearly 250,000 more midsize cars than compact cars in the U.S. Gas was cheaper then, and automakers had fewer small models to sell. But by 2015, J.D. Power expects compact and subcompact cars to command 20 percent of sales, while midsize cars will account for just 14 percent.

This fall, Toyota released a new version that increases fuel economy to 35 miles per gallon and sells for even less than the old model. But it’s facing tough competition from smaller cars such as the Hyundai Elantra, which gets 40 mpg and costs $5,000 less. Elantra sales surged 46 percent to 161,000 through October, while Camry sales fell 9 percent to 251,000.

One reason companies are racing to improve their small car offerings is an upcoming increase in fuel efficiency standards. Carmakers have agreed to double the average fuel economy of their fleets to 54.5 miles per gallon by 2025. Companies will have to meet that goal with more efficient gas engines, hybrid technology and other methods. But they’ll also meet it by selling more small cars.