Thursday, June 15, 2017

Can the New Polo Squeeze Into America’s Shrinking Subcompact Market?

By: Timothy Cain
It’s a Volkswagen Golf, only slightly smaller and with a more affordable price tag.
Isn’t this what you’ve always wanted?
Maybe not.
The 2017 Volkswagen Polo is a close relation to the Mk7 Golf Americans can get their hands on, and shares the MQB platform that underpins just about everything at the Volkswagen Group except the factories themselves. But in a U.S. market that’s increasingly willing to pay just a bit more for a larger car with essentially no degradation in real-world fuel economy, would the sixth-generation Polo stand a chance?
Probably not, especially given the speed at which subcompact cars are losing sales.
There’s certainly been no shortage of speculation in the past regarding the Polo’s possible U.S. future. Some five years ago, AutoGuide reported that Volkswagen was “prepared if they wanted to get a product [Polo] out to market very fast.”
Three years before that, Car And Driver said hatchback versions of the Polo wouldn’t make their way to America, but a four-door sedan “is considered a strong candidate for American sales.”
In 2008, the New York Times quoted a Volkswagen of America spokesperson who said, “We have no plans to import the current version of the Polo. Maybe for the future, as we are always considering what is appropriate for the market.”
After U.S. sales of core subcompact cars fell 9 percent in 2015 and 3 percent in 2016, sales are down 17 percent through the first five months of 2017. Only the Toyota Yaris, boosted in part by the inclusion of the increasingly popular Yaris iA (which operated previously as a Scion and is actually a Mazda) has seen sales increase this year
Combined sales of the Chevrolet Sonic, Ford Fiesta, Honda Fit, Hyundai Accent, Kia Rio, Nissan Versa, and Toyota Prius C are down 21 percent, a loss of 37,000 sales over a span of just five months.
Moreover, most of the automakers that compete in the category are distant afterthoughts. Nissan owns 30 percent of the market.
Compact cars, with help from a greater number of nameplates, to be fair, are more than five times stronger and aren’t declining at anywhere near the pace of subcompacts. Kelley Blue Book says the average transaction price for a subcompact car in May was over $16,000, too high a price for many consumers to swallow when a compact car (averaging $20,595 in May) is typically more powerful, more refined, and more spacious.
America’s subcompact market has already lost the Mazda 2. The Ford Fiesta’s future is clearly in doubt. Remaining automakers are struggling to locate buyers.
Of course, the sixth-generation 2017 Volkswagen Polo, which will follow the Polo’s historic strategy of looking entirely like its predecessor, isn’t making its way across the Atlantic. You may find it enticing. But most Americans do not.

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