There’s no replacement for the Beetle
Volkswagen’s decision to kill its iconic Beetle “is all the more painful because of what’s replacing it,” said Chris Bryant. That’s right, another compact sports utility vehicle. Is that going to “capture hearts the way the ‘Love Bug’ did”? Doubtful. But small, inexpensive cars are rapidly becoming an endangered species in Western markets. Consumers want SUVs and “carmakers have been happy to oblige.” In the U.S., big cars and trucks account for 70 percent of the new vehicle market, as cheap credit and low gas prices make the larger cars more affordable. In Europe, small cars still make up about a third of the market, but in a somewhat perverse twist they are actually threatened by tougher emissions standards. “The high cost of electrification technology is difficult to combine with the economics of smaller, cheaper cars. Installing an emissions-cutting kit in a compact car requires either a prohibitively high sticker price or the sacrifice of profit margins.” And unless battery prices fall, “several entry-level models might be facing the chop.” All this means that there will be fewer new vehicles available for poorer or younger customers, many of whom have already switched to car sharing, bike sharing, and e-scooters. “SUVs have killed the small, affordable vehicle,” but their future is not assured, either.