A small car? A tiny car! With the #2, Smart is set to launch another ultra-compact model that can even fit sideways into a parking space. Julian Bossert/smart Europe/dpaThe Ford Fiesta was one of the best-selling cars in Europe, yet it has now been consigned to the history books.Production of the Fiesta stopped in 2023 and it has not yet been replaced in the Ford line-up.The combustion-engined car was the victim of the high cost of meeting stringent emission regulations for petrol-burners and the lack of profit to be made from selling them.This explains why, until recently, manufacturers have refrained from any serious commitment to this sector, say industry experts at Berylls, a strategy consultancy based in Munich.AdvertisementAdvertisementFew have reacted quite as drastically as Ford which simply ditched the much-loved Fiesta.But a few small cars are now popping up again - like the electric versions of the Renault Clio and 5 models, even if most manufacturers are still holding back. Toyota has given its Aygo a minor makeover while other models like the budget Kia Picanto from Korea have remained unaltered.This is all the more surprising since small cars are a segment that appeals to more customers than ever before, said Robin Hornig, editor-in-chief of German motoring magazine Auto Bild."Because new cars have become significantly more expensive overall, this segment represents a realistic way of moving up to a brand-new car for many," said Hornig.AdvertisementAdvertisementA new small car offers clear advantages over a potentially larger used car for the same price: "You get modern safety systems, the latest technology and, for the first few years, peace of mind regarding maintenance and repairs," said the journalist.There are hardly any limitations to worry about anymore. While design is a matter of taste and the specifications and ambience are ultimately determined by the budget, small cars are now almost on a par with larger models when it comes to safety and driver-assistance systems.Fitting them is the only way they can meet the requirements set by the authorities and testing bodies such as EuroNCAP: “The range of options is wider than ever before,” said Hornig.There are simple, functional entry-level models such as the Dacia Sandero, which, as one of Europe's cheapest cars, starts at €12,790, and there are luxury and lifestyle models such as the Mini, which can cost as much as €50,000 in its top-of-the-range specification.AdvertisementAdvertisement“In return, many small cars today offer comfort, driver assistance systems and the sort of space that used to be the preserve of the compact class,” said Hornig, describing the segment’s rise: “The boundaries are becoming particularly blurred when it comes to electric cars.”And that is where a lot is happening right now. While conventional small cars are dying out, at least in Europe, they are currently making a big splash as electric vehicles.“Admittedly, the expensive batteries don’t exactly make it any easier to turn a profit on small cars,” said the Berylls experts, tempering the euphoria.However, to meet their CO2 targets and drive the widespread adoption of electrification, manufacturers have a host of new models in the pipeline.AdvertisementAdvertisementAnd because they are spreading these across several brands and thus achieving higher volumes, they are hoping for so-called economies of scale, falling costs and corresponding returns.“It is important that European manufacturers, in particular, once again focus more strongly on small, affordable models – and not just on large vehicles with expensive features and high profit margins,” said Hornig.“The small car segment is crucial for reaching a broad range of customers. Anyone who fails to offer an attractive range in this segment will lose market share – particularly to competitors from China, who are specifically targeting the market with cheaper models.”The best example of this new commitment is the embattled VW Group, which has just launched a major small car offensive and has redesigned its Modular Electric Drive Matrix (MEB) specifically for this purpose.AdvertisementAdvertisementAfter coming clean following the diesel scandal a decade ago, the German maker is now having to fight off cheap Chinese competition at home and abroad.VW said the switch from rear-wheel to front-wheel drive, new motors and smaller batteries has brought the entry-level price of a car down to €24,990.According to the manufacturer, this is how much the 4.05-metre-long ID.Polo is set to cost when it launches this summer with 37 or 52 kWh batteries offering a range of up to 450 kilometres under standard conditions. Engines range from 116 to 211 hp (85-155 kW).It will lead the group’s new quartet of compact cars. Hot on its heels are the Cupra Raval, also designed as a conventional small car, and the similarly styled city SUVs, the Skoda Epiq and VW ID.2.AdvertisementAdvertisementMeasuring around 4.16 metres in length, with up to 475 litres of boot space, a range of over 430 kilometres and prices starting at around €26,000 for the Skoda and €28,000 for the VW, these models should appeal to families.VW has announced an even smaller and more affordable entry-level model, which is expected to launch next year as the ID.Up and is being developed with a target price of €20,000. Meanwhile, rumours are mounting at Audi that this new range of small cars could also give rise to a successor to the A2.Hyundai is talking about an Ioniq 1. Even the Smart Fortwo, the epitome of the city runabout, is set to make a comeback later this year under Chinese ownership as the Smart #2. So far, developers have not yet released any specific details.However, the two-seater is set to be under three metres in length and cost a little over €20,000. It will get double the range compared to the previous 130 kilometres.AdvertisementAdvertisementAnd if anyone still doubts the bright future for small cars, it might be worth looking in the direction of Cologne. Over at Ford's German hub, it seems the Fiesta has not been forgotten. Preparations are currently underway for the electric rebirth of the model.The electrically reimagined Renault R5 is sure to warm the hearts of fans of more classic styling. Karim Jasper/Renault SAS/dpaIt looks smart, it’s compact and it’s electric: the Cupra Raval. Cupra/dpaThe Polo is also set to make a comeback soon – as the ID.Polo with an electric powertrain. Volkswagen AG/dpaThe new Renault Twingo bears a slight resemblance to the iconic model of the 1990s – now with four doors. Renault SAS/dpaAdvertisementAdvertisementIt is still only a near-production concept car, but VW’s ID.Cross could soon become the electric equivalent of high-riding small cars. Martin Meiners/Volkswagen AG/dpaAlmost a compact car: the Dacia Sandero. Dacia/Renault SAS/dpaSkoda's electric Epiq will be available to order in Europe from May 2026. Škoda Auto/dpa