Sub-Compacts, Compacts Gain Momentum and Share in US Market

Grace Hamulic

Fuel-efficient, smaller vehicles are moving off U.S. retailer lots much faster in the first two months of this year compared with the same time period in 2011, due in part to the rise in prices at the gas pump—averaging more than $3.80 per gallon across the country.*

Sub-Compact Conventional vehicles, led by the Nissan Versa, averaged only 36 days on retailer lots before being sold this year, down from an average 92 days in the same period of 2011. Compact Conventional models, led by the best-selling Honda Civic, averaged 42 days before being sold vs. 66 days a year ago, according to our Power Information Network® (PIN) transaction data.

Both categories posted higher year-to-date sales, and together have gained more than 1 point of market share. Combined total (retail and fleet) sales for these two vehicle segments account for slightly less than one-fifth of the U.S. market’s deliveries—19.73% share vs. 18.66% a year ago (+1.07%).

In addition to hikes in gasoline prices, consumers are trading in more models this year. In the first two months of 2012, the average age of a trade-in for someone purchasing or leasing a sub-compact model was 8.6 years vs. 8.4 years in the same period last year. This compares with 6.4 vs. 6.3 years for the industry. This year, consumers also have more choices since there is an expanded number of new or redesigned models—especially in the Sub-Compact Conventional segment. Currently, 21 sub-compact models are available and there are 15 compact models offered by manufacturers in the U.S. market. New sub-compacts that are boosting segment sales include the Scion iQ, Fiat 500 and Chevrolet Sonic.

Both small vehicle segments outpaced the U.S. auto industry’s 11.5% year-to-date sales gain vs. last year. Sub-Compact car deliveries climbed 37.7% from last year, to 88,223 units in total sales, which is equal to a 4.29% share. Compact cars also gained ground—up 13.3% from a year ago to 317,852 unit sales through the first two months of 2012. Compact cars, which make up one of the highest-volume segments in the industry, accounted for 15.44% of the market, up from 15.19% a year ago.

This year, nearly one-fourth (23.6%) of Sub-Compact vehicle owners traded in their fuel-efficient car or crossover utility (CUV) for another sub-compact model this year, based on our PIN data. That was 5 points higher than in the same time frame of 2011, when the percentage trading in the smallest models for another sub-compact model was 18.6%. Similarly, nearly 40% of compact vehicle owners traded in their Compact Conventional car model for another compact car model, according to PIN trade destination data. If not trading for a vehicle in the same segment, those trading in a Compact Car or Sub-Compact Car were more likely to opt for either a Midsize Conventional car or a Compact CUV. The destination of Compact Conventional cars to these two segments was 32% and 24% for Sub-Compact Cars.Grace Hamulic, PIN production manager at J.D. Power and Associates                         

 PIN Demographics  Sub-Compact    Sub-Compact  Compact     Compact
  Jan-Feb 2012 Jan-Feb 2011 Jan-Feb 2012 Jan-Feb 2011
Customer Age 47 47 47 47
Female % 48.0% 47.0% 44.1% 44.6%
Days to Turn 36 92 42 66
Vehicle Price Less Customer Cash Rebate $16,606 $15,249 $20,392 $19,075
 Buyer Age (16-35) 28.7% 28.2% 28.8% 28.1%
Buyer Age (35-55) 40.8% 42.2% 40.7% 42.1%
Buyer Age (56+)  30.5% 29.6% 30.5% 29.8%
APR 5.95% 5.78% 4.19% 4.37%
Type of Sales-Cash (%) 19.9% 20.7% 17.8% 17.2%
Type of Sale-Finance (%) 73.2% 70.3% 62.3% 61.5%
Type of Sale-Lease (%) 6.9% 9.0% 19.9% 21.3%
Trade-In Percentage** 40.1% 36.8% 45.1% 42.0%
Trade-In Vehicle Age 8.6 8.4 7.2  7.2

Source: PIN data: January-February 2012 vs. 2011.

*The current price of regular unleaded gas on Tuesday, March 21 was $3.86 per gallon, according to AAA’s Daily Fuel Gauge Report. In California, the average price was $4.35 per gallon.

** Does not include lease returns


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