Earlier quoted context omitted.
Fuel economy standards, emissions standards, safety standards, & profit margins. If you want to sell cars and make money, compacts are not where it is at.
Compacts, subcompacts, and microcompacts are very popular in Europe. Is this because Europe has fewer and less restrictive standards for fuel economy, emissions, and safety? I am not an automotive policy expert, but I feel like Europe tends to regulate more than the US does.
This usually comes up when arguing about about FDA, which is uniquely bad at its job. When I try to point that out, people come out of the woodwork and argue as if I'm a nutcase libertarian who wants to abolish all regulations. No, there are countries with drug regulations that are generally tighter, and also the population has had access to UVA-blocking sunscreen for a decade.
The regulations that matter here are terribly written regulations that are more lax if your vehicle is bigger. EU has more regulations, but wouldn't ever make that mistake.