Compact car is a vehicle size class— predominantly used in North America— that sits between subcompact cars and mid-size cars. The present-day definition is equivalent to the European C-segment or the British term "small family car". However, prior to the downsizing of the United States car industry in the 1970s and 1980s, larger vehicles with wheelbases up to 110 in (2.79 m) were considered "compact cars" in the United States.
In Japan, small size passenger vehicle is a registration category that sits between kei cars and regular cars, based on overall size and engine displacement limits.
The United States Environmental Protection Agency (EPA) Fuel Economy Regulations for 1977 and Later Model Year (dated July 1996) includes definitions for classes of automobiles. Based on the combined passenger and cargo volume, compact cars are defined as having an interior volume index of 100–109 cu ft (2.8–3.1 m3).
The beginnings of U.S. production of compact cars were the late 1940s prototypes of economy cars, including the Chevrolet Cadet and the Ford Vedette.(p214) Neither car reached production in the U.S., however the Vedette was produced by Ford SAF in France.(p214)
The first U.S produced compact car was the 1950 Nash Rambler. It was built on a 100-inch (2,540 mm) wheelbase, which was nonetheless still a large car by contemporary European standards.(p214) The term "compact" was coined by a Nash executive as a euphemism for small cars with a wheelbase of 110 inches (2,794 mm) or less. It established a new market segment and the U.S. automobile industry soon adopted the "compact" term.
Several competitors to the Nash Rambler arose from the ranks of America's other independent automakers, although none enjoyed the long-term success of the Rambler. Other early compact cars included the Kaiser-Frazer Henry J (also re-badged as the Allstate), the Willys Aero and the Hudson Jet.
In 1954, 64,500 cars sold in the U.S. were imports or small American cars, out of a total market of five million cars. Market research indicated that five percent of those surveyed said they would consider a small car, suggesting a potential market size of 275,000 cars. By 1955, the Nash Rambler that began as a sideline convertible model became a success and was now available in station wagon, hardtop, and sedan body styles. During the Recession of 1958, the only exception to the sales decline was American Motors with its compact, economy-oriented Ramblers that saw high demand among cautious consumers.
By 1959, sales of small imported cars also increased to 14% of the U.S. passenger car market, as consumers turned to compact cars. By this time, smaller cars appealed to people with a college education and a higher income whose families were buying more than one car. Customers expected compact cars to provide improved fuel economy compared to full-sized cars, while maintaining headroom, legroom, and plenty of trunk space.
Between 1958 and 1960, the major U.S. car manufacturers made a push towards compact cars, resulting in the introduction of the Studebaker Lark, Chevrolet Corvair, Ford Falcon, and Plymouth Valiant. These models also gave rise to compact vans built on the compact car platforms, such as the Studebaker Zip Van, Chevrolet Covair Greenbrier, Ford Econoline and Dodge A100.
During the 1960s, compacts were the smallest class of North American cars, but they had evolved into only slightly smaller versions of the 6-cylinder or V8-powered six-passenger sedan. They were much larger than compacts by European manufacturers, which were typically five-passenger 4-cylinder engine cars. Nevertheless, advertising and road tests for the Ford Maverick and the Rambler American made comparisons with the popular Volkswagen Beetle.
Compact cars were also the basis for a new small car segment that became known as the pony car, named after the Ford Mustang, which was built on the Falcon chassis. At that time, there was a distinct difference in size between compact and full-size models, and early definitions of vehicle size class was based on wheelbase, with models under 111 inches as compact, 111 to 118 inches intermediate and over 118 inches as full size, at least until EPA classes based on interior volume of the passenger and cargo compartments were introduced in the later 1970s.
In 1973, the Energy Crisis started, which made small fuel efficient cars more desirable, and the North American driver began exchanging their large cars for the smaller, imported compacts that cost less to fill up and were inexpensive to maintain.
The 1977 model year marked the beginning of a downsizing of all vehicles, so that cars such as the AMC Concord and the Ford Fairmont that replaced the compacts were re-classified as mid-size, while cars inheriting the size of the Ford Pinto and Chevrolet Vega (such as the Ford Escort and Chevrolet Cavalier) became classified as compact cars. Even after the reclassification, mid-size American cars were still far larger than mid-size cars from other countries and were more similar in size to cars classified as "large cars" in Europe. It would not be until the 1980s that American cars were being downsized to truly international dimensions.
In the 1985 model year, compact cars classified by the EPA included Ford's Escort and Tempo, the Chevrolet Cavalier, Toyota Corolla, and many others.
In Japan, vehicles that are larger than kei cars, but with dimensions smaller than 4,700 mm (185.0 in) long, 1,700 mm (66.9 in) wide, 2,000 mm (78.7 in) high and with engines at or under 2,000 cc (120 cu in) are classified as "small size" cars.
Small size cars are identified by a licence plate number beginning with "5". In the past, the small size category has received tax benefits stipulated by the Japanese government regulations, such as those in the 1951 Road Vehicle Act.
In 1955, the Japanese Ministry of International Trade and Industry set forth a goal to all Japanese makers at that time to create what was called a "national car". The concept stipulated that the vehicle be able to maintain a maximum speed over 100 km/h (62 mph), weigh below 400 kg (882 lbs), fuel consumption at 30 km/L (85 mpg‑imp; 71 mpg‑US) or more, at an average speed of 60 km/h (37 mph) on a level road, and not require maintenance or significant service for at least 100,000 km (62,000 mi). This established a "compact car" target that was larger than what has become known as the "light car" or the kei car.
One of the first compact cars that met those requirements was the Toyota Publica with an air cooled two cylinder opposed engine, the Datsun 110 series, and the Mitsubishi 500. The Publica and the Mitsubishi 500 were essentially "kei cars" with engines larger than regulations permitted at the time, while the Datsun was an all-new vehicle. These vehicles were followed by the Hino Contessa in 1961, the Isuzu Bellett, Daihatsu Compagno and Mazda Familia in 1963, the Mitsubishi Colt in 1965, and the Nissan Sunny, Subaru 1000, and Toyota Corolla in 1966. Honda introduced their first four-door sedan in 1969, called the Honda 1300. In North America, these cars were classified as subcompact cars.
By 1970, Nissan released their first front-wheel-drive car that was originally developed by Prince Motor Company which had merged with Nissan in 1966. This was introduced in 1970 as the Nissan Cherry. In 1972, the Honda Civic appeared with the CVCC engine that was able to meet California emission standards without the use of a Catalytic converter.