BRUSSELS - With pollution laws becoming increasingly stringent in Europe, you would think that the city car segment would be growing, but actually the segment looks in danger of dying.
Apparently the pressure to technologically upscale these cars for CO2 laws and ever-stricter safety standards is becoming a bit too much for manufacturers, who already struggle with thin profit margins in this end of the market, often referred to as the A-segment.
Peugeot and Citroen have already confirmed that they plan to drop their respective 108 and C1 models, and Volkswagen is rumoured to be letting go of the Up in its current form in the not too distant future, possibly to be succeeded by an ID.1 battery car. Renault too, looks likely to give up on its Twingo in favour of an electric car inspired by the Renault 5.
Battery cars are, however, still too expensive for entry-level buyers and this has led to concerns of an affordability crisis in some countries.
However, there is some good news for cash-strapped consumers as Toyota has announced that it is not giving up on the A-segment city car market. While its current entrant, the Aygo, is related to the aforementioned 108 and C1 as part of a previous joint venture, the Japanese carmaker has confirmed that it will be forging ahead with a new A-segment contender that’s based around its own GA-B platform, which also underpins the latest Yaris and Yaris Cross models.
Toyota says that all three products will help it to achieve the necessary economies of scale, with combined production set to surpass the 500 000 mark in Europe.
Most importantly, Toyota has also confirmed that the new A-segment car will have an internal combustion engine in order to keep the model within reach.
“Today the A-segment is heavily dominated by products featuring internal combustion engines, illustrating that budget is a key consideration – and the market outlook sees this strong mix continuing, especially for customers where financial accessibility is a dominant factor,” said Toyota Europe.
Interestingly, the current Aygo is being phased out in South Africa following the recent launch of the Agya, which is sourced from Indonesia and based on a Daihatsu platform. However, it’s not impossible that the next-generation Agya could be related to the new European A-segment car as Toyota seeks to improve efficiencies of scale by moving most of its products onto the new TNGA platform.