Sales in the compact segment fell by 6% compared to Q1 2015, the second-worst performance from among all mainstream segments, better only than the minicar segment. While one could be inclined to continue the narrative that it’s the low gas prices that are driving consumers to the segment above, my feeling is that few consumers are abandoning compact cars from mid-sized ones for economy reasons. Rather, the compact segment is full of aging cars that are nearing their retirement, with only the hot (sales-wise) new Honda Civic, refreshed Nissan Sentra and niche Scion iM providing any new blood. But, unlike for the subcompact segment there is hope on the horizon in the form of a refreshed Toyota Corolla, as well as a new Chevy Cruze, Hyundai Elantra and Subaru Impreza.

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Sales in the compact segment grew by 1% compared to 2014, a better performance than in either the minicar or subcompact segments, thought still behind the industry average of 5% growth. With the latest crop of compact cars being large enough to accommodate a whole family sales in this segment are less sensitive to gas prices – consumers are less likely to migrate to the segments above simply because they no longer need an economic car now that gas is super-cheap. For many people a compact car is all they need. [Read more…]