In the context of the automobile industry, downsizing is a practice used to transition vehicles from one size segment to another. Commenced during the Malaise era, downsizing is done in response to consumer and government demands influencing vehicle design. As vehicle product lines completed their model cycles, automobile manufacturers developed the next generation of a vehicle with a smaller exterior footprint to allow for weight reduction and increased fuel economy, using a shortened wheelbase and body length.

In the United States, the automotive industry began in the 1890s and, as a result of the size of the domestic market and the use of mass production, rapidly evolved into the largest in the world. The United States was the first country in the world to have a mass market for vehicle production and sales and is a pioneer of the automotive industry and mass market production process. During the 20th century, global competitors emerged, especially in the second half of the century primarily across European and Asian markets, such as Germany, France, Italy, Japan and South Korea. The U.S. is currently second among the largest manufacturers in the world by volume.