What do Toyota, Nissan and Honda all have in common? (Besides the fact that they are all Japanese automakers, that is?) They all re-entered the subcompact market in 2006 after abandoning it years ago. What's more, Mazda is planning to bring its subcompact Mazda2 to U.S. shores next year, Suzuki has signaled its intent to enter the B-segment with its popular Swift hatchback, and the domestics are in the game with the Chevrolet Aveo and forthcoming Ford Fiesta.

So, where does that leave Subaru? After all, the company has roots in small cars, starting with its first automobile, the downright minuscule 360, all the way up to the off-the-wall, four-wheel drive, three-cylinder Justy and its unconventional CVT.

Subaru spokesman Michael McHale tells Wards Auto, "The thing with the B-sector is you have to ask how you make money at the lower levels. You look at the pricing on the B segment – it's a tough segment to make money." Indeed it is – with base models of some competitors starting just under $10,000, profits are in very short supply.

For an automaker as small as Subaru, taking a risk on what is likely to be an unprofitable model generally isn't a smart idea. In other words, don't hold your breath for another subcompact Subaru any time soon.

 

Good move for them, they don't need to go there, no one is asking for a small Subie. He is right, the market has very very small profits and Americans do not like them. Other markets they are more appropriate.

Toyota, NIssan, Honda have the small car maket locked here. Lets see will the new Fiesta and Focus will do.

 

The margins are getting tighter , the competition more aggressive , and the buyers are more frugal.

I have this feeling that Subaru and mitsubishi will be struggling more and more over the next 5-10 years. I hope this new platform developed with toyota will allow Subaru to make a little money

 

This is incorrect. Toyota never abandoned subcompacts in the American market. They have sold subcompacts for decades, starting back in the early 1980s with the first Tercels, Starlets, and Corolla FX-16s. The Tercels were built until the late 90's, then replaced with newer subcompacts such as the Echo and Yaris. In addition, Toyota's Scion division also sold the subcompact xA and xD models.

 

another fact is that subbie does not do their own compacts globally anymore anyway, they rebadge Toyota's in Europe and Japan, because it does not make sense for them to do subcompact on their own... So the whole article is flawed from start on, subbie simply does not do subcompacts anymore on their own.

 

Not only that, but the Impreza has been so popular, especially after the turbo models came to the American market, that there is little reason for Subaru to do smaller subcompacts here. The Justy, when it was sold here, simply did not catch on with Americans. Of course, with an additional 15-20 years of experience since the unimpressive Justy was introduced, Subaru, if it wanted to, could probably do a better subcompact today, but the potential market for it doesn't seem to be there in the American market. Besides, Suzuki already produces an excellent subcompact with AWD...the SX-4, so any Subaru competition would be going up against it (even though the SX-4 dsoesn't sell that well). And the SX-4 has a nice feature the Subarus don't.....a 3-position FWD/AWD/Lock switch for versatility.

Of course, with the new CAFE fuel-economy laws coming up in 4-5 more years, that could change things. Subaru may be forced into smaller platforms whether it wants to or not.

 

not sure if subbie owners want to get part time awd with fwd bias though... it is inferior solution to symetrical awd system that subaru uses.

 

btw current Just is just an rebadged Toyota Passo.