The classic city runabouts are dying out

Cars have to be profitable for the manufacturer. Anything that is not profitable or sells poorly is removed from the range. Sales of small cars have been falling noticeably for several years now. The reason: stricter emission limits and mandatory assistance systems for greater safety mean that expensive technology has to be installed - making cars increasingly expensive. The consequences for prices are drastic. Mini cars, for example, have become almost 50 percent more expensive between 2019 and 2023. And electrification is causing prices to rise even further.

Cult cars such as the Fiat Cinquecento or the Mini in the 1950s and 1960s and later models such as the Fiat Panda, Renault Twingo or Smart Fortwo helped a broad population to achieve individual mobility. The small city runabouts were previously affordable, dispensed with unnecessary bells and whistles and thus fulfilled the best prerequisites for entry into the automotive-mobile world. However, a remarkable number of manufacturers have announced that they are phasing out their mini-cars and will no longer be developing successors.

Of course, electrification and greater safety would be technically possible, but the actual costs are hardly compatible with the pricing. Against this backdrop, data analysts from automotive market researcher JATO Dynamics have now compared the German registration figures for 2019 with 2023. How much market share has the A-segment lost in that time? Which models are still on sale? And how has the price level developed?

The trend is clear: while just under 230,000 subcompact cars were sold in Germany in 2019, the figure for 2023 was less than half that at just over 110,000 units. This means that, even though overall registrations declined during this period, the market share fell significantly from 6.3% to 3.9%, albeit in waves rather than continuously. The number of models on offer has also almost halved. It fell from 19 (January 2019) to ten (January 2024). The individual model versions fared even more dramatically: While there were still 384 different variants to choose from in 2019, there were only 60 at the beginning of this year, meaning that the average number of versions has shrunk from a good 20 per model on offer to just six.

However, the price is where things get really tough. While a mini car cost an average of 12,750 euros in 2019, four years later it was already just under 18,400 euros. A price increase of almost 50 percent. By January 2024, the price of entry-level cars had fallen again by just under 1000 euros. The average prices for SUVs in the A segment did not rise quite as drastically. But they still went up from €15,840 (2019) to a good €18,260 at the start of 2024. However, at around €800, the two vehicle categories are closer together than is the case in other segments. Here, SUVs are usually much more expensive in comparison.

But which compact car models are still available today? And how much do you have to fork out for them? Surprising, but true: at €14,555, a car from Germany was the cheapest model on offer here in Germany at the beginning of the year: the VW Up with a 1.0-liter engine and 48 kW. However, it was still available in 2019 with 44 kW for 10,260 euros. The cheapest model at the time was the Citroen C1 with a single-liter engine for 9240 euros.

Five years ago, you could buy seven models for less than 10,000 euros. But even then, the price range was already considerable: the cheapest Fiat 500 cost 12,590 euros, while its factory-tuned twin brother, the Abarth 595, cost a whopping 6300 euros more. Today, however, you have to pay an incredible 26,290 euros for the little scorpion from Italy. You can easily get a much larger and better-equipped compact class car for that. The cheapest electrified model at the beginning of 2024 was the Fiat Panda MHEV with mild hybrid drive for almost €15,000. Entry into battery-electric driving starts at just under €22,000 for the Elaris Pio from China. However, the price level for the smallest e-cars has hardly changed since 2019.

In contrast, a lot has happened in the past five years in terms of registration figures for drive systems. In January 2019, just under 17,000 microcars with combustion engines and just 550 with electric drives were registered; one year later, there were only 9,000 combustion engines and 1,200 battery electric vehicles (BEV). Since then, not only have the overall figures fallen dramatically, but the distribution between the different drive types has also shifted significantly. At the beginning of 2024, only 3200 combustion engines were sold, but almost 1500 mild hybrid vehicles and 1200 BEVs
were sold. One month earlier, the figure was almost 4,200, although e-cars were still being subsidized by the state.

Conclusion: The decline of affordable small cars is not the result of heartless corporate strategies, but a clear consequence of the political requirements for greater environmental protection and safety. Electrification is currently the only way for manufacturers to reduce the environmental impact of their vehicles. It can therefore be assumed that the range will have to continue to diversify in the coming years and could move in the direction of small electric cars. It remains to be seen who will win the race and at what price - Germany, the USA as well as China and France could all enter their options into the race. (aum)