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The small car conundrum

Compacts burn less gas, but what if big cars last longer?

BARBARA RIGHTON | September 10, 2008 |

Here's a radical thought for the car-buying public. Small cars have no future. In fact, all those sub-compacts and compacts, the Hyundai Accents and the Mazda 3s, the Toyota Yarises — even the perennially popular Honda Civics — may soon be nothing but scrap. In fact, by buying them instead of heavier, sturdier mid-size sedans or even pickup trucks, lots of well-meaning Canadians are just contributing to landfills. So says Richmond Hill, Ont., automotive analyst Dennis DesRosiers, whose most recent study on vehicle longevity tends to point out certain truisms consumers ignore. Never mind the panic at the pumps, DesRosiers says, or the "misfocused" green movement. Small cars, even the most popular brands like Toyota, can be bad investments, both for the planet and the pocketbook.

"Small cars don't last," DesRosiers says. "They fail to retain value, utility or desirability." And while longevity may not be a sexy subject, it stands to reason that if some vehicles are useful longer than others, what consumers save in fuel efficiency will be lost in higher capital costs. In other words, small car buyers may be robbing Peter to pay Paul and manufacturers are just following suit.

The current obsession with cutting fuel costs and reducing greenhouse gas emissions has put the focus on compact cars. Automakers are rushing to supply the growing demand for cars that sip gas rather than guzzling it. But DesRosiers isn't the only voice in the industry who says that focus is wrongheaded for the same reason that environmentalists find fault with cheap furniture: sure these cars are small, but if they don't stand the test of time, they may end up doing more environmental harm than good.

Continued Below

Of course, as DesRosiers admits, more volatile forces than durability are currently occupying the marketplace. High gas prices, a looming recession and environmental concerns have all surpassed longevity in the minds of Canadian consumers. In the U.S., where drivers traditionally have preferred larger cars, this year's housing and building bust, and the threat of $4-a-gallon gas, have left the Big Three scrambling to reconfigure truck plants — perhaps prematurely — to produce smaller cars. So far Americans aren't buying. Sales of small entry-level vehicles in the U.S. were up less than four per cent this summer, and last month GM's vice-chairman Bob Lutz swore demand for large sport utility vehicles was on the rebound. Still, the major automakers are focusing all of their energy on improving the fuel efficiency of their fleets and reducing the size and weight of vehicles as a key part of that effort. Says GM Canada's Stewart Low, "GM is banking on a huge investment to make a new small car. And we won't start out by saying it will be less durable. How long would we be in business if we did that?"

But according to DesRosiers and other analysts, small cars are less durable. First off, they are built lighter. Secondly, they are cheaper, so they attract younger drivers who tend to maintain them poorly. They have a lower resale value, which guarantees they won't trade hands many times before they are scrapped, and they're more likely to be written off by insurance companies if they are involved in serious collisions. In other words, "the useful life of the vehicle" is as short as their wheel base, according to Erich Merkle, an automotive consultant with Crowe Chizek in Grand Rapids, Mich.

In the U.S. last year, some 12 million vehicles were scrapped, according to R.L. Polk Co. Heavier, sturdier vehicles, such as three-quarter-ton pickups, says Merkle, tend to stay on the road, rather than heading for the scrap heap. "Structurally, they should last longer than a Civic," he says. Comparing the entry-level Chevrolet Aveo (1,148 kg), for example, to the mid-size Chevrolet Malibu (1,642 kg), Merkle adds, "You will get rid of the Aveo faster. It's much lighter, it doesn't have the strength. After about three years, the Malibu will be worth something; the Aveo, no."

In some people's opinion, the immediate future is worth more than a reliable older car, regardless. If the average Canadian puts 20,000 km a year on a car, says Low, the fuel burned between a small and a mid-sized car will be dramatically different. "There is a huge environmental benefit in driving smaller vehicles." But that may be only for the short-term view.

"Would it be green in a larger way if a person was to keep a car longer?" asks Merkle. "Sure, because it takes energy, it takes resources to produce that car." But the car business would suffer, he adds with a laugh. "Production would be even less than it is now." Like DesRosiers, Merkle advises consumers to buy a mid-sized car that is a couple of years old and hang onto it. That way they can sit contentedly and watch the parade of tiny cars in their neighbours' driveways come — and go.


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