Five years after a black swan event disrupted the old normal in the car industry, it’s still hard to get into a new car, just for slightly different reasons. Near-zero-interest subvented financing is nowhere near as universal as it once was, prices are up across the board over the past few years, everyone’s getting squeezed on cost-of-living, tariffs have created some questions over how expensive cars will get in the future, and the result is that cheap small cars seem to be big winners in the first quarter of 2025.
Let’s look at Nissan. On first glance, some things in this sales report are pretty bad. The bread-and-butter Rogue, Nissan’s best-selling model in America, suffered a 31.6 percent sales decline in the first quarter, with the Frontier pickup truck not far behind with a 26.7 percent sales decline. At the same time, sales of the high-margin Armada are effectively flat, same with the Ariya EV, same with the Pathfinder. When it comes to larger crossovers, only the Murano is up, but 8,702 units sold will only take you so far.
So why are Nissan’s overall sales up 6.3 percent for Q1? As you probably guessed by the title of this article, affordable small cars are doing some big things, starting with the smallest. The cheap Nissan Versa is the last new car you can buy for less than $20,000 including freight and fees, and Americans seem to be taking a shine to it. Last quarter, 19,130 Versas found homes, up a whopping 156 percent year-over-year. Not only did it outsell the Frontier, it almost caught up to the Pathfinder in volume.
Then there’s the Kicks entry-level crossover, rebooted in a larger format that seems to have hit the sweet spot. First quarter sales are up 84 percent year-over-year to 25,365 units, which makes sense considering it offers a bunch of practicality for less than $25,000. Oh, and the list goes on. Sentra compact sedan sales are up 36.1 percent to 54,536 units, the mid-size Altima saw a 25.3 percent sales boost to 35,809 units likely due in part to a lower starting price than the Rogue, and even the Leaf EV more than doubled its sales to 2,323 units.
This isn’t just a Nissan phenomenon either. Looking at General Motors, the automaker might not build small cars for America anymore but it has a lineup of affordable subcompact crossovers that come pretty damn close. You know the excellent and wonderfully inexpensive Chevrolet Trax? It just posted a 53 percent Q1 sales increase to 59,021 units, meaning it outsold all heavy-duty Silverado variants combined. Over at Buick, both the Envista and the Encore GX posted year-over-year Q1 sales increases of more than 50 percent, 14,862 sales and 20,408 sales, respectively.
Moving on to Hyundai, first-quarter sales of the Elantra compact sedan are up 25 percent to 33,490 units, widening its lead over the Santa Fe, which also posted a banner sales quarter. Keep in mind, not only is the new Santa Fe immensely practical and outstanding value for a three-row crossover, it’s also one of the hottest family cars of the moment and yet it was still outsold by the Elantra.
Despite officially being discontinued at the end of 2024, the Mitsubishi Mirage posted a 45 percent year-over-year Q1 sales increase to 7,301 units. In addition to the car being officially dead, Mitsubishi has a tiny dealer footprint in America compared to Hyundai and Nissan, so that’s a pretty impressive feat.
Actually, things get even weirder over at Volkswagen, where the Jetta is now the brand’s best-selling product in Q1. Granted, we are in a bit of a gap for the Tiguan compact crossover with a new model just around the corner, but a 36.5 percent year-over-year increase for the Jetta put first-quarter sales at 17,778 units, ahead of the Atlas and Taos. Credit where credit’s due, the Taos subcompact crossover posted its own sales increase from 11,808 units in Q1 of 2024 to 16,885 units in Q1 of 2025. It’s another vehicle starting around $25,000 and reaping the reward of affordability.
As you might expect, sales of the Toyota Corolla and Honda Civic are basically flat, but that also means this boom in certain small car sales doesn’t come at a huge detriment to the compact segment’s sales leaders. The Kia K4 also posted Q1 sales of 37,004 units, up a tidy ten percent over sales of the Forte in Q1 of last year. All signs point to the reach of small, affordable cars expanding, and it’s not without precedent.
We’ve seen this sort of boom-bust-resurgence cycle before. Think back to the mid-2000s, and while SUVs were all the rage, rising fuel prices and the Great Recession in the late 2000s resulted in Americans returning to small cars, because they were affordable to buy and run. Flash forward to the mid-2010s, and not only did the crossover utility vehicle firmly establish itself as the dominant automotive form, but brands like Dodge, Chevrolet, and Ford announced plans to sunset their small cars. Over the next few years, the subcompact segment died out almost completely, with brands like Toyota and Honda abandoning their littlest options. However, in these times of economic uncertainty and belt-tightening, it’s time once again for the small car to shine.
Top graphic image: Nissan
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I got the smurf blue Civic hybrid like pictured last week. About $3k off MSRP. I’m old and cheap. Sidenote, related to the last paragraph’s reference to the Great Recession. My old car was bought used in 2014 thinking I’d keep it only 2 or 3 years, as I readjusted post-recession layoff and graduate school. It became my longest-owned car, a 2010 Focus, from the critically-derided 08-11 Focus design. It surpassed my expectations x100 and I sorta miss the little turd already. That car curiously sold so well they had to add extra shifts to meet demand, and it was the #1 replacement sale for cars traded under the Cash for Clunkers plan. I was not previously a wrencher, but I learned everything about that car and saved 1000’s from watching YouTube. Sometimes a reliable, affordable, mediocre car isn’t what your heart wants, but it’s what you need. I sold it to the cousin of a co-worker and I’m confident that if taken care of it can make it at least another 100k miles (from 165k).
How Exciting! As a child of the 80’s I’ll once again get to experience the awful economy we had and when most of the cars on the roads were crappy econocars since that is all we could afford.
As a non-North American, I’m just giggling at the idea of a US$20,000 car being considered cheap. That’s just a grand less than the equivalent drive away cost of a base Corolla hybrid hatch down here in Oz. And there’s many cheaper options…
I for one am just glad that US trucks are so expensive in Australia (and perhaps more so soon with the tarrifs?) our infrastructure does not really support them well – some exceptions for those that have to tow but generally we’ve done well enough without them.
I’m amazed they sell there at all. Last time I looked they cost almost 50% more than what they cost in the US.
I will believe it when it happens for any length of time. People will just take on more debt for longer to get the Canyoneros they crave. Look at the history of the automobile in the US – the pendulum ALWAYS swings back to bigger no matter what.
Adn these tariffs are going to be a temporary phenomenon. I sure hope nobody is making product plans for the future based on this nonsense.
Two things give me some hope here. Maybe, just maybe, people are leaning towards sedans again. Also, maybe people are thinking a CUV doesn’t need to be as big as a whale.
Very doubtful – even I, who hate CUVs with the blinding heat of a 1000 suns, would buy one before I bought a sedan. The hatchback/wagon body format is just so much more practical in too many ways, even when jacked up, butched up and the drive largely ruined. Most people neither know nor care about how a proper car should drive.
Reality is simply that I won’t buy either of course.
Americans are big people in a big land who like big vehicles. Hence why the biggest sellers are gigantic pickup trucks, even though the majority of them are simply sedans with missing trunk lids at this point.
A local to me Nissan dealer has 183 Sentras in inventory right now. On one hand that feels like way too many Sentras. On the other, if they’re all really on the ground inventory they may be glad to have that many that aren’t subject to tariffs.
I just drove one for a couple of days (rental spec) and I liked it a lot! It’s a great little sedan.
Please bring the Honda Fit back to the US Honda! I previously owned a 2008 5MT Sport and a 2012 5MT sport and they were incredible, spacious, fun, inexpensive cars!
Being in the business of car sales, I can see this already happening. People are downsizing for various reasons but the biggest is sticker shock in replacing their previous model. If they had a mid-size, that same price is a compact now. People in Denali’s are getting mid trims. I can’t blame them though, why buy more than you need?
I’ve noticed Ford and Chrysler are absent from this article.
Are we going to be reading an article a year from now about how Ford and Chrysler were caught with their pants down (like how GM and Chrysler were in the mid 2000s when the gas prices shot up and they had no fuel efficient products) by not having cheap offerings, thus receiving generous bailouts that the government wouldn’t even consider for an average American?
To be fair, GM and Chrysler had fuel-efficient products when that happened. What they lacked were compelling fuel-efficient products.
Also, there was a brief time when there was a waiting list for the Dodge Caliber. Dealers were selling them off the delivery truck.
I know Dodge would kill to have a Caliber to sell today. Even if lousy and thirsty for it’s size. But price and utility are top priorities for many buyers
What strikes me is that the Caliber retroactively looks like a proto-Crosstrek. Had they executed and marketed it better, it could have been ahead of the curve when it comes to the modern subcompact SUV segment.
As it was, I have plenty of experience with the Caliber. Dad had a 2007, which he bought lightly used in 2008. Ex-rental, an SXT and refrigerator white. I learned to drive in it. It was a piece of shit and it fell apart in four short years.
I don’t know how but my uncle had an appliance white 2007 Caliber SXT with the 2.0 CVT combo. He kept the thing on daily duty for at least 6 years when he got a 200 Limited (he was a Chrysler guy until recently), then the Caliber was passed on to one of his daughters and she kept it until 2019. Somehow the transmission never needed replacement but suspension, brakes and electrical issues ended up dooming that particular one
I’d bet that Ford made more selling 40K Mavericks than GM did selling $60K Trax
Chrysler has nothing but a minivan but it is the cheapest minivan you can buy
There is a subset of people that only pay a certain amount in cash for a vehicle. 20 years ago they would only pay $30k for a semi premium or a truck / SUV and maybe $15k for a car. Now it’s seems they have moved to $20k for a car and $40k for a semi premium or truck / SUV. Alot of those cars be had for $20k. Those people typically come out in a down time to get the best deal too. I still think a cheap little econobox BEV would do well almost everywhere. It’s amazing how many smart cars and other little cars driving around in the middle of nowhere.
All the GM vehicles named are imported, basically foreign.
And Nissan is trying to kill the Versa and Altima after 2025 when affordable vehicles are needed.
As well as the Leaf. I got mine new for $21,500. If they gave the Leaf NACS (which would make it cheaper as you wouldn’t have 2 different charging ports) and maybe some other minor changes while keeping the chassis, and drivetrain the same they’d sell like hotcakes.
Instead they made yet another Model Y knockoff that will have to compete in the already oversaturated Model Y knockoff market.
They also killed the Xterra seemingly days before the off-road boom. Nissan is starting to rival GM in the bad timing department.
Seems like they are consolidating the lineup so that the Sentra covers most buyers that are focused on an actual car. Which is what most of the automakers have been doing or moving toward.
Against an automatic Versa, the Sentra almost always has more cash on the hood, better financing promo, etc that they net out about the same cost. Between the price cut and more cash on the hood the Rogue is inching closer still to the Altima. Plus there’s the Kicks in the mix too.
Exactly that.
What were compact-class vehicles are edging into tweener or even convincingly midsize segments. A modern Civic has tons of space relative to its forebears, while the Accord (which has gotten quite expensive and which may not survive another generation) is practically full-size.
It looks like Nissan has set things up to make the next Sentra larger, so that it can be the automaker’s sole sedan.
The Accord isn’t practically fullsize. It is officially a large sedan and has been for more than a decade. The Civic is officially a midsize and is larger than a 90’s Accord
With Nissan – both the Sentra and Altima are classified as midsize and are almost the same size. The Versa moved to tje compact class years ago.
Almost every car gets bigger every generation. Almost all of the compacts and subcompact cars are long gone.
Manufacturers are actually building these cars again which helps. Over the past 4 years, you could hardly find a lot with any of these on them. Especially the Jetta, which our local VW dealers had approximately zero of for months at a time.
Are they? I can’t find any new addition to the market.
I’m just talking about quantity of cars on lots. The only cars available in significant quantities over the past 4-5 years have been high trim large, expensive vehicles. As those cars became more difficult to move, it seems like manufacturers have actually begun to build more of their less expensive models and trims. Finally.
As for new cheap models, there aren’t many, lol. The Trax/Envista combo sort of qualifies, if only because they’re cheap and worth buying, where the old Trax shouldn’t have been considered by anyone, regardless of price.
Hopefully that’s true. My wife purchased a Kia Rio5 about 2 years ago (now discontinued) and it took a month to get one.
I’m an older millennial so it’s difficult for me to see any SUV as a small car. Something like the Honda HRV which is based on the Fit still gets 33% worst mileage than a Fit with the commiserate financial premium.
R.I.P. Fit.
A friend of mine still has a second gen. We both believe it may be one of the best cars ever made. Does everything well.
I owned two, and I couldn’t agree more!
I got my 25 Leaf S brand new for $21,500 with free delivery. Didn’t have to haggle or anything for that price, got it in less than a week.
Good. One (possibly unintended) benefit of relaxing CAFE rules is reducing the incentive for manufacturers move away from car production to truck/SUVs.
Hopefully this will help kill the industry narrative that Americans don’t want small cars. Which would make the segment competitive again. Which would drive down costs for those that would benefit most from buying a small car.
Depends on how you define a small car but I doubt we’ll get any more of them.
Only small car sold new in the US IMHO is the Fiat 500e, which is just over $34K with delivery, rear seats are unusable unless you drive around full double leg amputees on the regular, it’s made by Stellantis in Europe (so no tariff proof), and as a personal gripe it has stupid electric external door handles, even though the interior door handles have mechanical backups.
Personally I got two preferences:
Small car I can fit into a parking space easily (length wise) without worrying about hitting the curb stop with my front facia.
Or regular length automobile that has enough ground clearance that I can use the curb stop as a means of judging how far I’m in the parking spot so I make sure I’m fully in it.
That being said for both preferences I really don’t need seating for more than 3 people (including the driver). If Fiat made the American 500e with a single rear seat in the middle and deleted the arm rest/center console there would be actual leg room and I probably would have bought it over the 25 Leaf I bought. Tbh the Leaf is a bit longer than I’d like.
Small car I can fit into a parking space easily (length wise) without worrying about hitting the curb stop with my front facia.
It’d be much better if all cars simply came with a front bumper camera that engaged at 3 mph or less
Nope, it will have the opposite effect. Biden era rules from 2027 to 2032 require cars to increase fuel economy by 2% per year, light trucks by 4% per year, and pickups like the F250 and F35O by as much as 10% per year.
Trump is likely to just revert back to his first term CAFE rules and require all light duty vehicles to increase by only 1% per year.
I replaced my aging Impreza with a Prius C right before the inauguration in anticipation of not only tariffs, but uncertainty over fuel prices. Fuel prices are still pretty good where I live, but even with the Trump mantra of “drill baby drill”, I don’t know for how long gas will remain relatively cheap. So I wanted something small (I live in a city), affordable, dependable, and as fuel efficient as possible. It’s a shame Toyota doesn’t sell a subcompact hybrid, or really any subcompact, over here anymore. I know it’s a class of cars that doesn’t exactly work in a giant country with thousands of miles of 80 mph highways, but for those of us who actually care about space and efficiency, they make sense.
The domestic brands may have given up on small cars in the 2010s and crossovers were growing in popularity, but it’s not accurate to say that smaller cars were shrinking across the board. Several like Civic, Sentra, Elantra, Versa, all set a sales record around the mid-2010s, even with multiple car options in the showroom and before the domestics abandoned their small cars, so it wasn’t just absorbing any dedicated sedan buyers from domestic brands (pissed off ones from quality – Powershift – maybe). I think most of these numbers are just a number of models returning to pre-pandemic sales levels. The smaller cars have been some of the most volatile as far as supply goes. If you look at Q1 2019 sales numbers, these seem like very similar figures. Not a bad thing by any means, but good context to have since that also was less economically uncertain.
Plus, this isn’t at the expense of larger vehicles, those were arguably more ‘protected’ throughout and so they just lack big % changes but are selling in big numbers too. Many models were touted as hitting some kind of sales record in their press releases: Hyundai says that Santa Fe, Tucson, and Palisade hit March sales records. Honda says the same of the Passport, CR-V had its best-ever sales month, and Kia said best-ever for the Carnival, Telluride, and Sportage too. Lexus and GMC as brands had their best-ever first quarter sales. Tahoe and Yukon best Q1 sales since 2007.
That the Rogue is down at Nissan likely means they are short on supply or people are shying away from it or both, which supports the price cut they just did.
There’s a few points in the releases too that seem to be pointed comparisons to early/pre pandemic totals – Honda said Odyssey crested 10k units for the first time in 4 years, GM said a few best Q1s since 2019 (Colorado, Enclave) or 2020 (Equinox).
VW is crazy not to bring the Golf back here.
And people would just keep buying the Jetta and Tiguan\Taos over the Golf 20:1 or more.
Which sucks, because I LOVE Golfs. Both regular and GTI. Bought two of them new.
Honda: BRING BACK THE FIT DAMMIT. With a 6 speed manual. And a de-tuned 1.5 Turbo from the Civic Si.
Yes, please. The only reason I’m not driving a Fit as my daily right now is because Honda couldn’t be bothered to make an Si version. So I bought a Fiesta ST instead which is more fun than a barrelful of monkeys, but horribly compromised compared to the Fit in the practicality department. My adult daughter is still driving the Fit we bought in 2011 and gave to her a couple years ago.
I love my Fiesta ST and will keep it until it doesn’t make economic sense, but you are right on the horribly compromised.
Ride is insanely harsh so I rarely take passengers. I have the Recaros so I never, ever take my car with a larger person as a passenger. The backseats when folded down are a goddam trampoline combined with the harsh ride and it gives my dog PTSD when he’s back there. Wind noise sucks. Road noise sucks. Single coat of shitty paint is flaking all over.
But at least I have all the juicy torque and get 32mpg around town while pulling g’s at every turn. It’s also been 100% reliable at over 100,000 miles and counting.
The wife hates everything about the ST almost as much as she hates everything about my minivan daily driver so she drives most places we go. Impractical for the win.
Ha. I’m the dedicated driver so I spend a LOT of time behind the wheel of our Outback.
I too bought a Fiesta ST, but if there was a high(er) performance version of the Fit? Zero chance I wouldn’t have cross shopped the option.
Including the Fit hybrid that you can get in other parts of the world.
In most markets, that is the default drivetrain.
Can we talk about the Honda Element, too, with a 6MT while we’re at it?