Can Cute Cars Save the Auto Industry?

(MoneyWatch)  A new wave of Cute Cars is upon us, and fans of Hello Kitty, frequent visitors to cuteoverload.com and real-life Jeanketeers will have a lot to like in the next couple of years.

Cute Cars like the Nissan Cube, the Chevy Beat and probably the Ford Ka are coming. The Cube, which is only one letter away from "Cute," is right around the corner, with a U.S. debut planned for late April 2009.

Cute Cars like the Smart fortwo, the Volvo C30, the Mini Cooper, the Scion brand, and the current version of the Volkswagen Beetle -- the bud-vase-equipped, great-granddaddy of all Cute Cars -- are already here.

I am not making this up: around my neighborhood, I sometimes see a Mini with red lips and long eyelashes. It may be cute, but Mini is a serious success in the U.S. market. Sales are above all expectations, mostly at sticker price. People are ponying up for hundreds if not thousands of dollars worth of extras per car.

Yet even Mini has learned that cute all by itself isn't enough for sustained success. Even Cute Cars need utility. They need to fit the brand. And they need to be able to wave hello to a sensible price-value relationship, even if it's a distant wave.

Accordingly, the current-generation Mini is bigger than the model it replaced in just about every respect. Mini this year also added the Mini Cooper Clubman model, with a squared-off rear, doors in the back and cargo room behind the rear seats. The Mini brand also gets free scheduled maintenance from parent BMW, which also helps to justify the premium price. The performance and handling are also much better than just OK.

High U.S. gas prices inspired the coming wave of Cute Cars, but in my opinion, high gas mileage won't be enough to sustain cars that have nothing else but good mileage and the cute factor going for them. The Volvo C30 is expensive for what it is, and considering what else you could buy for the same money; the same goes for the Smart fortwo, in my opinion.

The Nissan Cube is cute, but it isn't just cute. It has a lot of interior room for its size, thanks to its "cubic" shape. Pricing is expected to be in the same range as the Nissan Versa, which is about $13,000 to $16,000 for the hatchback version. The Cube and Versa share a platform under the skin.

"The Cube concept is, it's supposed to be sort of a 'magic box,' and it is, sort of. Considering it has such a small footprint, inside it is a pretty large vehicle," said Nissan spokesman Darryll Harrison, at a press introduction for the Cube in New York on Dec. 18.

Unless gas prices go back to $4 per gallon and stay there, a typical trajectory for a lot of these Cute Cars will be a big sales spike at launch, followed by a plunge to earth. The long-term successes will be multi-dimensional.

Note: "Jean Teasdale" is supposedly a columnist for the spoof web site theonion.com. She calls her (probably non-existent) fans "Jeanketeers."