Your car shouldn't look like it pumped iron at the gym

Smarter rulemaking and financial incentives can help make tiny cars appealing and affordable again

- Chris Bryant

Smaller cars are an obvious fix for crowded cities, limited resources and a warming planet. Yet, they have become an endangered species, as tougher regulations made them uneconomical to produce and people gravitated towards muscular sport utility vehicles (SUVs).

A continent that built iconic, utilitarian and wildly popular city cars, like the Fiat Cinquecento and Mini in the 1950s, needs to make tiny cars appealing and affordable again. Smarter rulemaking and financial incentives can help.

In Europe, the market share of small "A-segment" cars such as the Fiat Panda and Hyundai i10 has shrunk to the lowest in at least 20 years, according to figures shared with Bloomberg Opinion by data provider Jato Dynamics.

Automakers axed their smallest vehicles to protect profit margins and focused on larger, heavier and more expensive models, thereby denying their youngest and elderly clients a new ride.

In Germany, the birthplace of autos, the average cost of a new car has soared to around €57,000 (S$82,830), more than the average gross income. Prices in Italy, Spain and France are not far behind.

Larger, more expensive cars are partly a consequence of stricter safety and pollution rules, and hence all the technology modern vehicles must contain. (The number of people killed in road traffic accidents fell 16 per cent in the past decade, so tougher regulation has also been beneficial.)

And, of course, they are also a result of the trend for high-riding SUVs, which now account for more than half of European car sales. This has created a vicious circle whereby car buyers worried about the consequences of colliding with an SUV buy one to protect themselves.