Luxury Car Makers Hope Small is Beautiful

Washington DC May 3, 2010; The AIADA newsletter reported that the new Aston Martin Cygnet is definitely not the sort of car you’d expect to see super-spy James Bond driving. Measuring barely 10 feet from nose to tail, the three-door hatchback is the polar opposite of sleek Aston sports cars, such as the low-slung, 2-seat DBS, that you would normally see 007 piloting through his latest adventure.

According to MSNBC, Aston isn’t the only high-line maker betting there’s a growing market for downsized luxury products. And with regulators in Europe and North America clamping down on emissions and fuel economy, brands such as Mercedes-Benz, BMW, Audi, and even Cadillac are weighing in with pint-size offerings of their own.

But while there are a few solid success stories, the industry’s history also provides cautionary tales suggesting that downsizing is a potentially costly risk for luxury automotive brands.

BMW, for one, has succeeded with moves in both directions. There are its big SUVs and there is its Mini brand, whose models could almost fit in the cargo compartment of the large X5 Sport-Activity Vehicle.

Mercedes, meanwhile, took aim at the commuter car market with the Smart brand. Audi, in turn, has moved from A4 to 3 to 2, and at this year’s Geneva Motor Show pulled the wraps off the super-mini A1.

Click here for the latest on luxury automakers’ scaled-down offerings.