Mark Tapscott at the Examiner (link) does a good job discussing why it is that small and fuel efficient cars are not taking off in the marketplace yet. He mentions several major reasons, such as safety issues (perceived and real), and cargo capacity.
I can add a few more.
Perceived Value: Americans still associate size/mass with value. Many of them are not yet ready to agree to pay mid-sized car prices for a small car.
Ride and Handling: Americans seem to be divided on how they want their cars to handle. Some of the best selling cars (Toyota Camry, Corolla) are comparatively squishy, while others (Honda Accord, Civic) have sharper handling and firmer rides. While it is not impossible to produce a small car with a softer ride, light weight and short suspension travel limits do make it more difficult. Also, when efficiency is the overriding design factor, one of the easiest places to lose weight is in sound isolation materials. Do the "silent majority" want little cars with go-kart manners (Mini, Smart) or do they want scaled down couches? Currently, most small cars are tuned more towards go-kart.
Styling: Looks still matter. Americans want a sharp looking car, although what "sharp looking" is is not always consistent. Designers have to work hard to avoid designing short little jelly beans with high roofs, which is really the most space efficient design with some aerodynamic efficiency. On a larger car, there is more surface to play with, and more ways to draw the eye. Americans don't really want something that looks like a rollerskate, with a tall roof and little wheels pushed out to the corners.
Comfort: Americans are not getting thinner. I recently witnessed about 500lbs of female Target shopper (a mother and daughter?) flow out of both sides of an old Dodge minivan, you could almost hear the springs sigh in relief as the ride height jumped by 2" in front. Show those women a Fiesta and they will probably laugh at you. They might then go ahead and eat it.
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