American automakers are gaining a better reputation when it comes to compact cars. Toyota and Honda had cornered this segment and it didn’t seem like other models had a chance. But the figures don’t lie. This year, sales of General Motors Co.'s Chevy Cruze compact are higher by 10%. Meanwhile, Ford Motor Co.'s Focus compact sales have increased by 90%. Researcher LMC Automotive said that in 2011, the share of GM, Ford and Chrysler Group LLC in the compact and subcompact market in the U.S. increased to 26% (its highest in four years) from 20% in 2010.
U.S.-based automakers have lost a generation of consumers to Japanese companies as they focused on the very profitable SUVs but they’re now planning their comeback on small cars. The small cars by the U.S. companies have been made more stylish and now come with very advanced technology features like the voice-activated stereos, which had been used just on bigger, costlier models.
At the Geneva Motor Show, Ford CEO Alan Mulally told reporters that what customers are looking now are compact cars with the best quality and the most excellent fuel efficiency, safety and design. Detroit automakers know that SUVs and pickups have higher profit margins but they have realized that a successful automaker has small cars as a foundation. That’s because compacts are usually what a buyer picks as a first car and this makes it the first step in building loyalty.