Small European Cars Shine

A Diminutive Trio Manage to Skirt the Global Decline in Sales

By LEILA ABBOUD
There's a bright spot amid the global automobile sector's gloom: Sales of small, chic European cars -- Daimler AG's Smart, Fiat SpA's 500, and BMW AG's Mini Cooper --have grown this year.
The three have common traits that likely are sparking their success: trendy design, a high-end image and fuel efficiency. The cars' popularity shows how, even in a tough economic climate, consumers still can be enticed to buy cars that are perceived as special enough to make a lifestyle statement about their owners.
"These cars have enormous emotional appeal," says John Lawson, a Citigroup automobile analyst in London. "But as products, they also hit consumers' priorities on fuel economy and style on the head, so they are selling well."
To be sure, sales of niche models won't save the ailing automobile sector. Car sales have plummeted since August as consumers spooked by a looming global recession delay spending on big-ticket items. The credit crunch also has made it harder for some people to secure loans to buy cars. To cope, many car makers are closing factories temporarily to keep vehicle supply in line with demand. Companies such as France's Renault SA, Germany's Volkswagen AG and General Motors Corp. and Ford Motor Co. in the U.S. are lobbying for government aid to help them weather the financial crisis.
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