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Detroit's Problems with Small Cars Started Decades Ago

New York Times Autos:

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The New York Times' Autos section provides great insight into U.S. automakers' storied inability to create, build, and market successful small vehicles. The article, "Detroit's Small Packages Arrived, and Left, Early," starts the story with the steep U.S. recession of 50 years ago.

Answering the question as to why GM, Ford, and Chrysler hadn't produced a small, economical vehicle before the '58-'59 recession (that brought with it an unemployment rate of 6.8 percent and plunging auto sales), the Times advises us to look back a decade earlier at the largely failed U.S. experiment in small autos. Conventional wisdom states that Americans just weren't interested in small cars with great fuel economy. But the Times explains that the first U.S. attempt at small cars "had the bad luck of being produced by chronically undercapitalized independent automakers." Therefore, they offered little price advantage over existing base models and suffered with crude powertrains and bare-bones equipment (some models even lacked flow-through ventilation). Even worse, most of the low-tech powertrains offered little advantage in fuel efficiency. Looking through the microscope afforded by the Times, it's quite clear why Americans didn't want to spend their money on ill-conceived compacts when they could spend a few bucks more to get a far nicer vehicle.

These small cars were produced by the likes of Kaiser, Hudson, and Nash. Henry J. Kaiser, who built Liberty Warships for World War II, got a loan from the Reconstruction Finance Corporation who stipulated that the Kaiser's vehicle, the Henry J., must retail for no more than $1,300. The New York Times says the resulting vehicle "reeked of cheap" but "wasn’t particularly cheap to build, and it sold for just a little less than the least expensive versions of standard sedans from the Big Three." The vehicle never sold in significant volume.

The Hudson Jet, while a respectable performer and much better equipped than the Henry J., suffered from ill-contrived styling and actually retailed for more money than full-sized cars. Again, sales did not materialize.

The only U.S. small carmaker from this period to get it right was Nash. The styling resonated with buyers, vehicles were well equipped, and prices low. But the Times claims that the single most important attribute that earned Nash good sales numbers with the American buyer was the existence of "a full line of Ramblers in many body styles, including a jaunty convertible." This was the postwar era, and growing families wanted to display their prosperity through ostentatious trim packages, gobs of chrome, and trick features that perhaps the neighbors couldn't afford. Nash happily--and intelligently--responded with its comprehensive lineup. The original Nash sold well from 1950 to 1955.

While tempting to point the finger at Detroit when the '58-'59 recession hit, calling them poor planners for having nothing but ornate behemoths to offer cash-strapped buyers, a closer look at history shows that Americans tastes had soured on the compact car years before. This bad timing led to the Japanese and European auto invasion, and firms like Toyota, Honda, BMW, and Volkswagen have been gaining market share ever since.

Detroit has tried several times since then, getting close, but never quite matching the imports. The Chevrolet Corvair of the 1960s was quite brilliantly conceived and well-executed. It drove well, offered impressive economy, competitive passenger comfort, and an attractive price. But a few crucial faults, a dealer network that didn't know how to properly service the exotic aluminum-alloy engine, and a consumer advocate named Ralph Nader quickly put the nail in the Corvair's coffin. Earlier this decade, Ford rolled out its Focus to cheers and Car of the Year awards. But nearly a decade later, the vehicle languishes on the original platform, continually losing its competitive edge to foreign compacts that have been redesigned once or even twice in the Focus' lengthy first-gen life.

Time will tell whether the 2011 Chevrolet Volt, Chevrolet Orlando, next-generation Ford Focus, and Ford Fiesta will finally, at long last, bring affordable, reliable, and desirable small cars to American automakers' portfolios. If energy costs and market realities keep exerting themselves as strongly as they have as of late, failure or even mediocrity in the small car game will not be an option for GM, Ford, and Chrysler.--Colin Mathews

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Comments (3)
  1. Read the article actually, thought i was quite poignant. I don't think Americans are naturally anti-small cars but have been averrse to them for three main reasons:
    1)Generally US small cars have been crap, really god awful pieces of drek, need we say any more than Pinto. Bad cars, bad memories bad press. even now they insist on importing the worst Daewoo's and other crap. Vs Euro experience of great little driving cars like GolF GTI, Peugeot 205 GTI, Rennault 5 Turbo, even the Astra (GM in europe) and Focus have been relatively good cars (those that came before it less so, except original escort, what a cracker of a car). BAd experience has lead to people dismay to these. This is changing thanks to effots of the Japanese makers who have shown you can have good small cars.
    2) Price. Cars in the US are relatively cheap, at least compared to Europe (and OZ). The price differential between small cars and normal size sedans is not so big, so why not spend a few extra bucks for the bigger, supposedly safer car. In euriope price difference is large so you have to spend a lot more so generally not worth it unless you really have the money.
    3) price of fuel. Fuel is expensive in europe but generally incredibly cheap in the US. Small cars use less fuel so you save a lot more money in Europe owning a small car than a big one, again given the price of fuel, the savings not so great in the US.
    Reason number 1 need not exist. Focus and Astra show GM and Ford can make decent small cars. Just have to trust themselves. Teh Japanese and more recently Europeans have shown americans small need not be crap. That perception is changing and they need to be on board. and Number 3 well price has dropped but $4 a gallon was the magical price that made people change their behaviour. Their is limited supply of the stuff so after recssion is over in 2 years prices will go back up. and there is a new reason. The Environment, whether you belive the hype or not, more people now consider the Environment when making purchasing decisions. Small capcity direct fuel injection engines give greater credence to building smaller lighter vehicles.
    GM and Ford need to start taking a chance on small cars in the US and follow the Japanese and Euro model not their own (or Sth Korea's).
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  2. You can go back to the pre-WWII American Austin, but the real first "small car' was the Crosely - and the one that cemented in most Amercians mind that small meant cheap and crude...... more recent Big 3 attempts have only reinforced that view....Falcon, Chevy II, Omni/Horizon, US Escort (they shoulda' imported the European model) Cavalier, Saturn, etc., etc.
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  3. Now I am in no way going to try and prop up the big three's compact efforts, but I beg to differ on a few points.
    While cars like the Cavalier, Escort, Omni and Neon were in no way innovations - they were incredibly popular in the 80's-90's. High School parking lots were jammed with these cars in GT, RS, Shelby and Turbo forms for as far back as I can remember. Yeah a Civic Si from 1992 was a much better car than a Cavalier, but it was also much more expensive. And when GM launched Saturn, let's not forget the onslought that followed.
    Give them their due. Not saying they made the best, but in some cases, they fit the bill in a way that fed into the demand of the populous.
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