Over the past few years, you've noticed, as we have, that affordable models have been disappearing one by one from the automotive market. In fact, only a handful of sub-$25,000 models remain, and it's hard to even find that many under the $30,000 mark.
Yet this is what people need – and want. Last year, both in the U.S. and Canada, sales of cheaper vehicle models showed substantial growth. Nissan’s Sentra, for example, had an excellent year, even though the current generation, which debuted in December 2019, is starting to age.
At the recent national meeting of American dealers (NADA) in New Orleans, Louisiana, several manufacturers expressed their intention to respond to consumer demand by launching cheaper models in the near-future.
Ford, Mini, Mitsubishi and Ram have all reportedly told their dealers of their intentions.
But what does this mean in concrete terms?
Base variants
For the most part, talk has been of offering base variants of existing models that can be offered for less. Think of Ford's STX variant of the F-150, or the base versions of the Escape and Explorer SUVs. Mitsubishi is planning a more affordable version of the RVR.
Price drops
Mini has talked of lowering pricing on certain of its existing models. Other carmakers could opt for that route.
New models
Ram is looking to expand its product family with more affordable versions (a mid-size model is being considered first).
The trend of base models being dropped from product offerings has been in place for some time now. The usual argument from automakers has been that demand for those vehicles is low. Often, that is of the manufacturer's own making, in the sense that the cheapest model doesn't carry adequate basic equipment. It's a way of forcing the customer towards more equipped, more expensive versions.
Electrification is also expensive, forcing manufacturers to think in terms of maximum profitability with each vehicle sold. Hence the disappearance of cars in favour of SUVs, among other things.
New realities are forcing a change of approach. Fewer and fewer consumers under the age of 35 can afford to buy a new vehicle. In the U.S., the figure was 17.6 percent last year, down 3 percent compared to the pre-pandemic period.
Strong sales for cheaper models
Sales figures for certain models speak for themselves when it comes to buyers' needs and realities.
Sales of the Chevrolet Trax, with its base price of under $22,000 USD, climbed to over 200,000 units in the U.S. in 2024. Those of the aging Malibu sedan climbed above over 117,000 buyers (many of them leasing companies, no doubt); its price of entry is $26,995 USD.
For Nissan, sales of the Versa rose by 72 percent in 2024, to 42,589 units. The Sentra jumped 40 percent to 152,659 units sold, and the Kicks saw sales rise by 16 percent to 77,356 units. All these models start at under $24,000 USD.
The Mitsubishi Mirage, the cheapest car on the market, saw its sales explode by over 125 percent... even as it is (currently) destined to be pulled from the market.
It remains to be seen how many carmakers will follow though on their talk. It seems a good bet that we’ll see more base models offered, yes. But when will smaller, more affordable models return?
