The small city cars are vanishing

For manufacturers, cars need to be profitable. Anything that is not profitable or sells poorly is cut from the range (Convertibles for example are slowly running out of air). Sales of small cars or microcars have been falling noticeably for several years now. The reason: stricter emission limits and mandatory assistance systems for greater safety make it necessary to install expensive technology – and therefore cars are becoming more and more expensive. The price increases are drastic. Mini cars, for example, have become almost 50 percent more expensive between 2019 and 2023. And electrification is causing prices to rise even further, as can already be seen in some models for the smallest cars available – the so-called A segment.

In the 1950s and 1960s cult cars such as the Fiat Cinquecento or the Mini and later models such as the Fiat Panda, Renault Twingo or Smart Fortwo not only made distances shorter, but also helped a broad population to achieve individual mobility. They thus opened up new opportunities for many people. The small city runabouts are usually affordable, do not have any unnecessary bells and whistles and ease people into entering the world of automobility.

However, numerous manufacturers have already announced that they are phasing out their mini-cars and will no longer develop successors. Of course, electrification would be technically possible, but the actual costs are hardly compatible with pricing, not to mention the growing safety requirements. The data analysts from automotive market researcher JATO Dynamics have compared the German registration figures for 2019 with 2023. How much market share has the A-segment lost in that time? Which models are still on sale? And how has the price level developed?

Dramatic drop in sales

The trend is clear: while just under 230,000 microcars were sold in Germany in 2019, this figure was less than half in 2023 at just over 110,000 units. This means that, even though overall registrations declined during this period, the market share fell significantly from 6.3% to 3.9%. This didn’t happen continuously, however, but in waves. The number of models on offer has also almost halved, falling from 19 (January 2019) to ten (January 2024). The individual model versions fared even more dramatically: While there were still 384 different variants to choose from in 2019, there were only 60 at the beginning of this year. Meaning that the average number of versions has shrunk from a good 20 per model on offer to just six.

However, the price is really high. While a Mini car cost an average of €12,750 in 2019, four years later it was already just under €18,400. A price increase of almost 50 percent. By January 2024, the price of entry-level cars had fallen again by just under €1,000. The average prices for SUVs in the A-segment did not rise quite as drastically. But they still went up from €15,840 (2019) to a good €18,260 at the start of 2024. However, at around €800, the two vehicle categories are closer together than is the case in other segments. SUVs are usually much more expensive.

But which compact car models are still available today? And how much do you have to pay for them? Surprising, but true: at €14,555, a car from Germany was the cheapest model on offer here in Germany at the beginning of the year – the VW Up with a 1.0-liter engine and 48 kW. However, it was still available in 2019 with 44 kW for €10,260. The cheapest model at that time was the Citroen C1 with a single-liter engine for 9,240 euros.

Drastic price increase

Five years ago, you could get seven models for less than 10,000 euros. But even then, the price range was already considerable: the cheapest Fiat 500 cost 12,590 euros, while its factory-tuned twin brother, the Abarth 595, cost a whopping 6,300 euros more. Today, however, you have to pay an incredible 26,290 euros for the little scorpion from Italy. You can easily get a much larger and better-equipped compact class car for that. The cheapest electrified model at the beginning of 2024 was the Fiat Panda MHEV with mild hybrid drive for almost €15,000. Entry into battery-electric driving starts at just under €22,000 for the Elaris Pio from China. However, the price level for the smallest e-cars has hardly changed since 2019.

In contrast, a lot has happened in the past five years in terms of registration figures for drive systems. While just under 17,000 microcars with combustion engines and just 550 with electric drives were registered in January 2019, one year later there were only 9,000 combustion engines and 1,200 battery electric vehicles (BEV). Since then, not only have the overall figures dropped dramatically. The distribution between the different drive types has also shifted significantly. At the beginning of 2024, only 3,200 combustion engines were sold, but almost 1,500 vehicles with mild hybrid drive and 1,200 BEVs. One month earlier, the figure was almost 4,200, although e-cars were still being subsidized by the government.

Conclusion: The decline of affordable microcars is not the result of heartless corporate strategies, but a clear consequence of the governmental requirements for greater environmental protection and safety. Electrification is currently the only way for manufacturers to reduce the environmental impact of their vehicles. It can therefore be assumed that the range will have to continue to diversify in the coming years. This means it could move in the direction of small e-cars. It remains to be seen who will win the race and at what prices. Germany, the USA as well as China and France could all enter their options into the race.

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