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Americans have had a long love affair<\/a> with big cars and the fantasy of hulking pickup trucks on wide open roads, but now many are finding new flings<\/a> with smaller cars simply because they\u2019re cheaper.<\/p>\n Sales of sub-size SUVs in the U.S. shot up 20% in the first half of this year, far outpacing overall vehicle sales growth of 2%, according to data from Cox Automotive<\/a>. Moreover, compact car sales increased 18%, and compact SUV sales rose 12%, while full-size pickup truck sales slumped 4% in the same time period.<\/p>\n Amid a 19.6% price increase<\/a> of automobiles from January 2021 to 2024, most of these compact SUVs are under $30,000, with many under $25,000\u2014a stark difference from the $60,000 price tag<\/a> of a pickup truck and an easier-to-swallow pill. Often with lower interest rates<\/a> than even gently used cars and similar features to their larger counterparts, smaller vehicles have become a formidable alternative.<\/p>\n \u201cConsumers need the functionality,\u201d Cox Automotive senior economist Charlie Chesbrough said in a CBT News interview<\/a> in April. \u201cThey need the flatbed of a pickup or the cargo area of an SUV, but they\u2019ve got to get the smaller size, because at these prices, they\u2019ve got to look for ways to save money.\u201d<\/p>\n As more consumers look to buy smaller, affordable models, car manufacturers are meeting them where they are, introducing new features like heated, leather seats, rearview cameras, and sunroofs that were once reserved for European luxury vehicles, Brian Moody, executive editor of Kelley Blue Book, told Fortune<\/em>.<\/p>\n But while smaller cars are more affordable and just as practical as bigger ones, there\u2019s also simply more compact entrants on the market that have driven up sales. Compact SUVs like the Mazda CX-50<\/a> and Chevy Trax<\/a> have emerged in the market only during the past 20 years.<\/p>\n \u201cThere\u2019s just simply more of them,\u201d Moody said. \u201cSo when there\u2019s more choice, it\u2019s likely to attract more consumers.\u201d<\/p>\n The uptick in small car sales \u201cdoesn\u2019t mean that many people aren\u2019t still buying large pickups,\u201d Moody said. The top-three best-selling cars<\/a> in the U.S. last year\u2014the Ford F-Series, the Chevy Silverado, and the Ram Pickup\u2014were all large flat-bed pickups. And with car size continuing to expand since the 1970s<\/a> without any signs of slowing down as they accommodate both safety and luxury features, large cars will continue to be popular.<\/p>\n Because of the continued demand for large cars and trucks, auto manufacturers won\u2019t go all-in on compact vehicles despite positive sales data, David Oakley, manager of Americas vehicle sales forecasts at GlobalData, told Fortune<\/em>. For Detroit\u2019s Big Three auto manufacturers\u2014Ford, Stellantis<\/a>, and General Motors\u2014compact vehicle production<\/a> has decreased due to slim profit margins. As car sizes get smaller, there\u2019s greater pressure on car companies to match smaller price tags to the slimmer frames, something they\u2019re just not willing to do.<\/p>\n \u201cCompact is the smallest that most manufacturers probably want to focus on,\u201d Oakley said. \u201cAnd it feels like anything smaller than that is still going to be a little bit underserved.\u201d<\/p>\n But the industry will continue to make changes to appeal to those looking for compact, affordable cars. Moody notes that the No. 4 best-selling car below the top-three pickup juggernauts is the stalwart Toyota<\/a> Rav 4, which led the trend of compact SUVs after its introduction 30 years ago<\/a>. He expects the compact Toyota model to continue to creep up<\/a> the rankings as compact cars continue to rise in popularity.\u00a0<\/p>\n Moody also expects more hybrid compact SUVs to emerge, particularly as an alternative to electric vehicles, which, because of their large and heavy batteries<\/a>, are often oversized and expensive. Even EV producers are aware of the pitfalls of large electric cars, and they\u2019re aiming to\u00a0 produce smaller autos.<\/p>\n \u201cWe have to start to get back in love with smaller vehicles. It\u2019s super important for our society and for EV adoption,\u201d Ford CEO Jim Farley said at the Aspen Ideas festival<\/a> earlier this month. \u201cWe are just in love with these monster vehicles, and I love them, too, but it\u2019s a major issue with weight.\u201d<\/p>\n But the continued success of compact car sales will ultimately rely on companies keeping the promises associated with them, Moody argues: affordable prices, good resale value, and strong luxury features.<\/p>\n \u201cYou want them to be successful?\u201d he said. \u201cMake it better.\u201d<\/p>\n<\/div>\n\nIndustry changes<\/strong><\/h2>\n