The segment of cheap (and small) cars is not only threatened by the unstoppable rise of SUVs. There are other factors that pose a drag on the survival of affordable cars that have been bringing together the bulk of registrations in the B segment.
These are really turbulent times for the very important cheap car market. Small affordable cars seem to be doomed in Europe . A death that is always associated with the unstoppable rise of SUVs. However, the popularity that SUVs have been gaining is not the only determining factor that we must take into account.
The increase in production costs, added to the crisis of microchips and semiconductors, has forced manufacturers to leave small cars, which long ago were the leading segment in Europe, in a second (or even third) place. The scarcity of certain components that are strictly necessary for the manufacture of vehicles has been a real drag on low-priced cars.
SUVs displace cheap small cars
In the period between the months of January and September 2022, small B-segment cars have been surpassed by small SUVs according to figures provided by Dataforce . This change, added to the decisions that certain car brands are making, has set off all the alarms. And it is that Ford’s announcement of the farewell to the Fiesta is still recent.
Sales have registered a 17% drop to 1.23 million units . A figure that contrasts with the 1.43 million small SUVs sold during the same period of time. Furthermore, compact SUVs also threaten to overtake small cars by 2023.
The 10 best-selling B-segment utility vehicles in Europe in 2022
Although manufacturers do not want to give up the market share represented by small cars, in some cases they have no choice but to drop these models . We have a clear example with Markus Duesmann, CEO of Audi, who confirmed about a year ago that the Audi A1, once it reaches the end of its commercial life, will have no substitute. A decision that is based on the increase in costs. Thomas Schafer, CEO of Volkswagen, has also dropped that the future of the Volkswagen Polo hangs by a thread due to emission regulations.
Cheap small cars and electric, an impossible combination?
Small cars are positioned as an ideal candidate to face the process of change to electric mobility. And the reason is none other since they are vehicles that are used mainly for short trips. However, it is very difficult to safeguard their position as affordable cars since manufacturers currently have no way to “mask” the cost of autonomy without affecting the price of the vehicle.
According to a report published by the Bernstein investment bank, up to 60% of the cost of producing an electric small car comes directly from the battery . A percentage that is reduced to 40% if we talk about a compact car.
Until the end of September, electric cars have represented only 6.3% of the total operations in the B segment. The undisputed leader of the category is the Peugeot e-208, followed by the Renault ZOE. The Opel Corsa-e closes this particular podium.
The best-selling subcompact electric cars in Europe in 2022
It is expected that in a short space of time the offer of available models will increase . Especially with the electric offensive that the Volkswagen Group will carry out by 2025. The arrival of electric utility vehicles from the Volkswagen brand itself and from Skoda will be key to the category. Even more so when a target sale price has been set that will start from €25,000. By the way, these new electric cars will be manufactured in Spain.
Renault, Dacia and Nissan are other brands to watch closely in this electrification process of the B segment. Launches such as the Renault 5 E-Tech, the successor to the Nissan Micra and even an electric Dacia Sandero will be equally crucial to revolutionize the segment. of subcompact cars in the incipient era of sustainable and, more specifically, electric mobility.
Until cheap electric utility vehicles (without aid or promotions) really materialize, thermal cars will be the last line of defense in a market that must deal with numerous challenges and problems. And it is that, as we have pointed out at the beginning of this article, these are turbulent times for the cheap car.
