A Simple Explanation Why America Doesn't Get European Hatchbacks

Europe is overrun with small hatchbacks, but you can only buy a handful of them in the United States. Why is that? One Redditor gave a simple, clear explanation why.

There are all kinds of hatchbacks (and other cars) we never see on US roads that are for sale in Europe like the new BMW 1 series, the VW Polo, the Audi A1, the Toyota Aygo or Auris, and a whole lot more from car companies that don't even sell in the US at all (the recently-praised Peugeot 308 springs to mind.) When one Redditor posted this picture of their not-for-US Nissan Micra giving an adorable happy new year message on the dash, another user wondered why that car isn't for sale in the US.

The simplest answer is that it's too expensive for car companies to bring over these hatchbacks. Why exactly is it too expensive? As Redditor Andrew Moriarty (aka King_Of_Avalon) explained in a wonderfully wonky post, it's all about regulations. Specifically, it's all thanks to regulations that are slightly different in the US as they are in the rest of the world.

In most of the planet, cars are made to international safety standards called the UNECE standards (United Nations Economic Commission for Europe, although it's now international and has little to do with Europe). Just about every country on the planet is a signatory to the ECE standards, and those who aren't will still accept them, except the US and Canada.

As he goes on to explain that not only are America's standards different than Europe's, they're probably worse.

The US has got its own incompatible safety standards called the Federal Motor Vehicle Safety Standards. In many cases, the FMVSS is actually worse than corresponding ECE standards; the rest of the time, like headlamps, it's just arbitrarily different. Canada has the Canadian Motor Vehicle Safety Standards, which are basically just the US FMVSS copied and pasted into Canadian law.

What does that mean for car companies? It means that if they want to sell one car in Europe and also in America, they have to develop three versions of it. That ain't cheap.

As a result of this, car manufacturers wishing to sell a certain model worldwide have to make three versions of each car:

  • ECE left-hand drive
  • ECE right-hand drive
  • US/Canada FMVSS/CMVSS

As a result of the large costs involved in retooling a car only for the American/Canadian market, most manufacturers won't even dream of spending all of the money to rebuild a model unless they think that it will be a reasonable success in North America. Consequently, the US and Canada actually have a shockingly low number of car models available compared to most other places. Here is an article that also explains why this happens.

It's entirely possible that if the US had access to the enormous lines of subcompacts that the rest of the world does, they might actually be modest sellers in major cities, and the car companies would break even. At the very least, they could decide to only import a few to sell just to test the waters and see what happens. But until the US opens up and starts allowing ECE safety standards, we'll never know.

From there Moriarty goes on to point out that this all looks a lot like what you call a "non-tariff trade barrier." That means it's a way to keep foreign cars out of America by making it expensive to sell them here. He goes on to say "this is in effect a non-monetary way to subsidize the US automotive industry." I myself am not prepared to say that non-aligned American/European car regulations are a distinct means of protecting the US auto industry, or just some kind of incompetence on the part of American and European regulators. A few years back I wrote up this article pointing out how German car regulators being bad at their jobs kept cars like Alpina BMWs off of American shores.

Moriarty does, however, back up his point by explaining that protectionism in this form isn't exactly uncommon in America.

This is further compounded by other non-tariff barriers such as the Buy American Act 1933 and the Buy America provision (s. 165) of the Surface Transportation Assistance Act 1983; in case you were wondering why all American police cars are Chevy or GM or something like that, there's your answer. Another great example would be the Fair Packaging and Labeling Act 1966, which in effect forces the repackaging and labelling requirements of all products sold in the U.S. and is a huge source of contention between the EU and the US. It's also had knock-on effects on Canada's metrication programme that linger until today. In fact, in many ways, the US is internationally infamous for its levels of non-tariff barriers (the lack of use of the metric system being another huge one that has enormous effects on construction/engineering/building materials and paper products, to name just a few examples). Even things that seem as innocuous as electrical mains voltage and frequency (AC, such as that supplied to most homes) has massive implications on what can and cannot be sold in the US. Electronics manufacturers have to pay close attention to voltage tolerances in their products, and completely rework any spinning motors due to frequency differences; these are especially important for any device designed to heat up, or which has a motor inside that spins. Another example would be mobile phones; there are two issues at play here:

  • North America uses different frequency bands than the rest of the world. Therefore, only phones that can operate on three or more bands can actually 'roam' internationally. The rest of the world uses 900 and 1800 bands, North America uses 850 and 1900.
  • There are two main types of mobile telephony technology: those based on GSM, and those based on CDMA. The entire planet uses GSM (your unique subscriber information is held on a removable SIM card), but North America and Japan also use CDMA (a non-removable chip inside the phone carries the information). In the US, AT&T and T-Mobile are GSM; Verizon and Sprint are CDMA. Therefore, even with the differences in frequency, if you're a GSM customer you'll probably have no problems roaming internationally if your phone is quad-band, as most smartphones are. If you're a Verizon customer, you'll have extremely limited functionality abroad unless you go to Japan or Canada.

If you're thinking that this is all the fault of Big Government and everything would be better if the party of Small Government were in charge, none of this would happen, he has news for you.

In short, if you're in the US, virtually everything you see around you is made to entirely different specifications; nothing you have could likely be sold abroad, and vice versa. This is by design, and it gouges the American consumer both in terms of price and choice. And for the Republicans to be the free-trade shills that they are, it strikes me as interesting that they're the primary proponents and creators of such barriers.

I will conclude by saying that the cost of regulations don't tell the whole story of why certain cars come to America. In this country, large trucks crossovers, and family cars still reign supreme. The cars that most car enthusiasts clamor for (like the recently-allowed R32 GT-R) would be niche sellers for the most part in the USA. Never forget that part of these cars' allure is that they're forbidden fruit, and the reality of Europe's small, diesel, hatchback carscape isn't all it's cracked up to be.

But there's a huge cost hurdle in front of car companies keeping these small-sales cars out of the US, and it's good to understand the regulations that make up that barrier.

(Hat tip to my buddy SomewhatSmarmy)

Photo Credit: BMW