In the old days life was simple. There were 4-door sedans and 2-door coupes and convertibles.
Station wagons were a small niche when they were known as Woodies. But in 1949, Plymouth built an all-metal wagon with a fold-down second seat. That turned a niche into a high-volume product.
Since then, making big profits from niches has become an industry goal. There have been many successes: sporty cars, led by theMustang; minivans, led by ; and SUVs, started off by the 4-door Jeep Cherokee and Ford Explorer.
It’s understandable auto makers are searching for new niches because big mature segments, such as the family sedan, are terribly competitive. TheCamry and Accord are really tough to beat, even though almost every major auto maker offers a good car in the segment.
It’s a jungle out there. That’s why everyone wants to find a new niche to exploit. But with 18 auto makers selling in the U.S., some are slicing the bologna too thin.
Take mighty. It’s very successful with its mainstream cars, but its niche products are foundering: the Element cross/utility vehicle only had 14,884 sales in 2009, Ridgeline pickup 16,464 and Insight hybrid-electric vehicle 20,572.
What went wrong? The Element is one of those boxy cars aimed at the ever-mysterious “youth market.” Evidently the youth don’t get it.
The Ridgeline is a “lifestyle” pickup, but buyers are perhaps turned off by the $30,000 price and the 4-wheel-drive’s front-wheel-drive bias. And the Insight HEV has not been able to find a following like thePrius. No hybrid has.
While it’s done well with other products, Mercedes sold only 2,825 copies of the R-Class in 2009. The niche? It’s a luxury CUV, but my guess is it’s not selling because it looks too much like a minivan for Mercedes buyers.
All the Toyota Scions now are struggling. Only 14,499 copies of the xD hatchback were sold last year. The once-popular xB (the box) saw only 25,461 sales. The tC coupe sold only 17,998. Not 60,000 sales in all. In 2006, Scion sold more than 173,000 vehicles. This was a lineup for young people that created great excitement at first. Now is it bad luck or a fading niche?
While Scion is struggling, remember Toyota created the niche success of the decade with its now mainstream Prius HEV. Despite falling sales, it was the 10th best-selling car in the U.S. last year, right behind theFocus.
What kind of new niches do we have today? There are car-like CUVs, such as the new Honda Accord Crosstour and boxy small cars, such as the Kia Soul andCube. And there are really tiny cars, such as the Smart and upcoming 500.
Most of the vehicles mentioned are from auto makers headquartered offshore. It’s not that Detroit can’t stretch a niche now and then. It’s easier for overseas auto makers to ship a few cars they sell elsewhere over here as an experiment. But it also shows the big foreign producers are not perfect. It’s nice to remember that, too.
Jerry Flint is a columnist for, and former senior editor of, Forbes magazine.