The automaker announced last year that the new-generation Micra, due in 2016, would be made at alliance partner Renault’s factory in Flins, France. Nissan aims to produce 82,000 Micras a year in France. By comparison, Nissan sold just 48,000 units of the India-made Micra in Europe last year.
Subcompact customers are incredibly demanding, Etienne Henry, former Nissan head of product strategy for Europe, told Automotive News Europe in March. “A subcompact used to be a second car, but that has evolved. Customers want to get the maximum for their money. With our future subcompact we have to deliver what the compact delivers today in terms of driving dynamics, perceived quality and practicality – that’s what these future customers want,” said Henry, a 2014 ANE Rising Star who was recently promoted to global product planning director for minicars, subcompacts and electric vehicles at Renault.
Another challenge facing automakers is finding new ways to improve subcompacts’ fuel economy. “It is probably difficult for engineers to achieve significant exponential leaps in powertrain efficiency … without spending significant extra amounts,” Urquhart said in a note to investors. “Given the tight margins for subcompacts, it is unlikely that OEMs will be willing to spend more on making small gains.” He predicted that could hit subcompact sales as cash-conscious buyers respond to ever-tougher taxation based on CO2 figures. The tight margins in the segment have kept most premium brands from entering, Poskitt said. The only true premium subcompact is the Audi A1, which would not have made the volume segment’s top 10 in the quarter with sales of 26,170 units, according to JATO data. In contrast, compact-sized premium models such as the Audi A3, BMW 1 series and Mercedes-Benz A class would have ranked Nos. 4, 5, and 7 if they competed again volume compacts in 2013.
The future for the segment, however, looks bright because of southern Europe’s sales rebound. IHS expects Italy’s, Spain’s and France’s subcompact sales to increase by double digits by 2020 compared with 2013. IHS’s Urquhart also predicts the segment will “recover significantly” to 3.38 million units by 2020 and once again become the “traditional stalwart” of the European car market.