The New B-Cars Are Coming, Ready or Not

Commentary

The Chinese government’s July 3 approval of a deal between domestic auto maker Chery Automobile and the Chrysler Group to design and build small cars for export to the U.S. arguably opens the door to a flood of B-segment cars here from a host of countries in Asia, South America and Europe.

The wave already has started, motivated by soaring fuel prices and pushed by a proposed U.S. government-mandated 35 mpg (6.7 L/100 km) corporate average fuel economy (CAFE) standard.

The question is whether the American car buyer is ready. In many minds, subcompacts mean low-quality, basic transportation and questionable safety. Add “Chinese-made” to the equation and “unreliable” comes to mind.

But it’s a mistake to equate cars built on B-platforms (no longer than 175 ins. [445 cm]) with bad B movies. In the global auto industry today, bigger is not necessarily better and certainly not as fuel-efficient.

And small need not spell substandard or even cheap. BMW, for example, can’t make enough British Minis to meet U.S. demand, despite a price range that tops off at $26,000.

Although Chrysler may require some fancy footwork to convince car buyers its Chinese offerings are dependable – especially given the recent spate of scandals related to Chinese pet food, tires and toothpaste – initial offerings from other Asian auto makers already are being well-received.

Included are the Honda Fit and Toyota Yaris built in Japan; the Chevrolet Aveo, Hyundai Accent and Kia Rio from Korea; and the Nissan Versa produced in Mexico.

Honda recently said it plans to up its ration of Fits ($13,000-$15,700) in the U.S. to more than 50,000 this year from an initial 30,000 when the car debuted here in April 2006. Dealers are clamoring for more, but the auto maker blames global demand for its capacity constraints.

Indeed, deliveries in Ward’s Lower Small group in the U.S. through June were 64.3% ahead of year-ago. And there are more entrants coming from Ford, GM and BMW, among others.

Yet, despite the B-car’s technical sophistication, affordability and fuel-sipping characteristics, safety concerns, rather than economy, remain the determining factors for many U.S. car buyers.

Says Joe Phillippi, principal of New Jersey-based AutoTrends: “B-cars vs. a Peterbilt, do we even need to talk about it?”

Perhaps we do. Heavy-duty commercial trucks are big and scary, and no light vehicles on the road really can stand up to them. That said, small cars do appear to be mismatched when it comes to even midsize SUVs and pickups.

But a study done several years ago by researchers at the University of Michigan in Ann Arbor found vehicle quality a better indicator of crash safety than size and weight. The researchers decided to challenge hypotheses arrived at after Senate hearings on CAFE standards.

Those assumptions said vehicle occupants would be at greater risk if forced to switch to lighter and smaller vehicles from popular heavy and large vehicles, such as SUVs and fullsize pickup trucks.

Their study found fullsize SUVs are no safer than the average midsize or large car – and many SUVs are no safer than some compact and subcompact cars, based on analysis of annual deaths per million vehicles.

“It turns out that relatively inexpensive, light cars do tend to be unsafe, but more expensive light cars are much safer and are as safe as heavier cars and SUV models,” says the lead researcher.

“If designers pay careful attention to safety in vehicle design, smaller cars can be, and indeed have been, made as safe as larger ones,” he concludes.

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