This week’s Hyundai Venue is a top seller in a rapidly shrinking segment of the auto marketplace — cars that list for under $20,000.
Once a mainstay of the industry, with every automaker offering at least one, if not more, entry level-priced vehicles to entice consumers to that brand, few automakers still embrace that business philosophy. Hyundai established its roots here with this strategy, as did many other auto brands, but now you only need to use a few fingers to count the models that you can buy for under $20,000 (with destination fee included).
Given that the average new vehicle transaction price has skyrocketed during the COVID-19 pandemic, up to over $42,000 in early November from less than $35,000 only a year ago, any consumers who have been in the new car-buying market are also being assaulted by the full retail, no incentives, no discounts, scenario for the majority of new vehicles at all of the brands.
While the move away from affordable entry-level compact and subcompact vehicles like our diminutive Venue (which starts at $18,750 with our SEL model shown stickering for $23,480) has been an ongoing event for almost a decade, these prices will leave millions of drivers shopping in the used vehicle market (three times larger than new) or the recently developed certified used car segment that automakers are expanding.
The Chevy Sonic, the best-selling small(est) car only three years ago, is now out of production. Budget priced Civics and Corollas are all cars of the past. The Kia Rio ($16,990) Mitsubishi Mirage ($15,100) or the Nissan Versa S ($16,000) are good transportation devices, yet their small margins vs. the ongoing computer chip shortage mean they will be in short supply as both automakers and dealers aim to maximize profits during the current strained economic paradigm.
Under this environment, buying a new vehicle, as we recently attempted, is a far different experience than in the past. The shift fracturing the retailing of automobiles — and other consumer goods — will continue to alter the landscape, and not necessarily for the good of the consumer. Caveat emptor, for sure, now exists in every segment of consumerism.
At 159 inches long, the four-door Venue is barely longer than a Mini-Cooper, making it one of the smallest offerings in America. Four adults will fit; five passengers is asking for lots of compromise unless three are children in the back. The cargo hold is larger than expected, with a deep well swallowing multiple soft bags, a month’s worth of groceries or enough gear for a vacation. There is no power liftgate, nor is it necessary, as lightweight (only 2,650 pounds) is paramount to the Venue’s efficiency.
Our Galactic Gray sample actually flattered the car’s design better than some other paint colors, while the interior proved to be the model of analog convenience with large knobs, dials and buttons. Taller than the similarly sized Kona (6 inches longer than the Venue) the Venue actually proved to be a very good commuter car with Sirius radio, navigation, blind-spot and rear cross-traffic alerts, forward collision warning, lane-keeping assist, rear camera and driver attention warning aiding in the drive. SEL trim included LED lighting all around, heated cloth seats, power sunroof, Android and Apple compatibility, plus a proximity key and push-button starting.
Power comes from a 1.6-liter straight-four without the turbo found on several other Hyundai models using this motor. With only 121 hp on tap, you won’t be the quickest from the traffic lights, but you will pass a lot of gas stations; realized economy for our urban/rural travel week together maxed out at 39 mpg, well ahead of the EPA estimates of 30/33 mpg. A CVT automatic transmission handles the power to the front wheels — no AWD is offered.
Hyundai and other Asian-based automakers remain committed to small cars like the Venue, as they build these machines for many more markets outside of the United States. Circumstances indicate that new car prices are sure to rise, while computer chip shortages are sure to persist for at least another year — further straining what vehicles are built and delivered to the market. Combined with a push for EVs, which consume even greater quantities of computer chips, as well as other materials being in short supply, consumers may well soon lament not buying cars like this Venue — right now.
Next week: Lincoln Corsair Reserve Edition