History in The United States
The modern version of this market segment was successfully established in 1950 when "the Nash Rambler was deliberately conceived as a luxury compact rather than an austerity model" and available only as a convertible, with hardtop (no "B-pillar") and station wagon and models added in 1951. By 1959, sales of European small cars and American Motors' Rambler "exploded" with many their buyers having above-average incomes leading commentators to describe "cultural motives behind their preferences" including the owners' "unconcern for symbols of success and importance that testified to the possession of the real thing." Long-time president, chairman, and CEO of General Motors, Alfred P. Sloan, described the rising demand for compact cars was not motivated by economy, but "was essentially a further expression of the customer's desire for variety." By the early 1960s, the market for smaller, more economical cars, "but with more comfort, looks, and luxury" than ordinary compact cars included, among others, the Mercury Comet featuring style and interiors that "sparkle with most of the glamour Americans are accustomed to in their bigger cars." During the late-1960s, buyer preferences fragmented the market, moving to intermediates, personal/specialty, and all-out luxury cars, while the demand slowed for traditional large cars. Increasing fuel prices and competition pushed AMC to "exploit special market segments left untended by the giants. In 1978, "AMC introduced its new Concord luxury compact" "represent an upgraded, more luxurious, more comfortable, more silent, more opulent automobile." Cadillac continued its sales leadership in the premium market by making changes with the market and introduced the 1982 Cadillac Cimarron, a luxury version of the compact GM J platform. The Cimarron helped to boost the automaker's Corporate Average Fuel Economy (CAFE), but its badge engineering of a front-drive, high-mileage model was evaluated as a low-value proposition in contrast to historic Cadillac luxury.
Today, automakers are responding to changes in the marketplace and in the "mind-set" of consumers looking for status on a budget. Traditional "luxury car makers are gearing up to offer small models that will test whether affluent U.S. car buyers are ready to concede that bigger isn't always better." Facing higher fuel costs and traffic, changes are sweeping through the luxury car market and "Americans are beginning to catch up with global trends."
Read more about this topic: Compact Executive Car
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