4 Hot Tiny Cars

DETROIT ( TheStreet) -- When the Sonic is introduced in the fall of 2011, it will become the only sub-compact made in the U.S.

But it will face tough competition from the sub-compacts already in the market, whether they are U.S.-built or not.

Sub-compacts cars today account for about 3.5% of the industry, but GM ( GM) thinks it will grow to 4.5% in the next two years, with the potential to increase further if fuel prices rise.

GM spokeswoman Margaret Brooks said the competition in the sub-compact market is one of the factors that led the automaker to decide to build the Sonic. "Once you see a critical mass of market opportunity, it made sense to look at doing the manufacturing in the U.S," she said.

GM has not announced pricing, but Brooks said the car will be competitive with Fiesta, which starts at $13,320, and Fit, which starts at $15,100. The Sonic will not be a bare-bones subcompact, but rather it will be roomy and will have advanced safety features. It will get about 40 miles per gallon.

TrueCar.com analyst Jesse Toprak noted that "We've seen the sub-compact segment become almost fashionable" because it now includes desirable cars, along with a predilection to buy them.

Here's a look at three other major players already in this growing market.

Toyota Yaris

The Toyota ( TM) Yaris sold 3,422 units in the U.S. in December. For the full year 2010, it sold 40,076 units, down 36.7% from the previous year. It comes in three models: a four-door-sedan, three-door liftback and five-door liftback.

Toyota calls the Yaris "a value-driven sub-compact car with proven reliability and excellent fuel efficiency." The car also has a broad array of safety features including vehicle stability control, traction control, anti-lock brakes, electronic brake-force distribution and brake assist.

With a five-speed manual transmission, Yaris is EPA-rated at 29 miles per gallon in the city and 36 miles per gallon on the highway. Pricing starts at $12,955.

Honda Fit

The Honda ( HMC) Fit sold 4,860 units in the U.S. in December. For the full year, it sold 54,354 units, down 19% from the previous year.

The Fit recently made Car and Driver's Ten Best Cars list. "We're equally zinged by this Honda's upscale interior, its quick and precise steering, an engaging shifter, spot-on ergonomics, a windshield as big as a minivan's, and a rear seat that is both adult-habitable and drops to the floor faster than a Marine pumping push-ups," the magazine said in its Jan. 2011 issue. "The Fit offers a fun-to-drive quotient that proves basic transportation isn't always basic."

The Fit is rated at 27 miles per gallon in the city and 33 miles per gallon on the highway.

Ford Fiesta

The new Ford ( F) Fiesta sold 5,212 units in December, its best month ever, and 23,273 units for the full year 2010 following its introduction.

The Fiesta is helping Ford to stake out its claim in the small car market. On Ford's December sales call, Ken Czubay, vice president for market and sales, noted that Los Angeles was the top-selling region for Fiesta, a good sign because California has long been a small-car market dominated by imports.

"The LA region is less than 5% of Ford's total U.S. sales, but for Fiesta LA is 10% of sales," Czubay said. "Going forward, that has huge implications for Ford, especially as we approach the Focus introduction. For us, California is an emerging market."

Fiesta gets 29 miles per gallon in the city and 40 miles per gallon on the highway.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

More from Stocks

Micron Shares Soar; Chipmaker Is 'Managing for Profitability' Now, Says Analyst

Micron Shares Soar; Chipmaker Is 'Managing for Profitability' Now, Says Analyst

Dow Slips 178 Points; S&P 500 and Nasdaq Also Decline

Dow Slips 178 Points; S&P 500 and Nasdaq Also Decline

Facebook CEO Mark Zuckerberg Deflects Tough Questions From European Parliament

Facebook CEO Mark Zuckerberg Deflects Tough Questions From European Parliament

What Does China's Tariff Deal Mean for Automakers Like Tesla?

What Does China's Tariff Deal Mean for Automakers Like Tesla?

Lowe's Taps Home Depot Veteran As New CEO

Lowe's Taps Home Depot Veteran As New CEO