(Copied from this article in my blog: http://galapagosizedautomotive.kinja.com/hot-hatches-a-potential-galapagos-phenomenon-from-euro-1786653501)
Hot hatches are a common topic ranging from small cars and large luxury cars, but we mostly use the term “hot hatch” for the small performance two-box hatchbacks, since many fast large luxury hatchbacks blurred the “large hatchback” designations due to fastback-like designs (large hot hatches including Audi RS7 and Opel Insignia OPC, to a few). Many European car makers are making exciting compact hot hatches, but this has made a Galapagosization on European car makers, and thus, many European carmakers failed to thrive in sedan-preferred global markets where classic three-box sedans are more favoured. And they didn’t build a Mitsubishi Evo-esque sports sedan even they made a small sedan each for the global range. They just didn’t care about dying compact sports sedan market where WRX STI was a lone goner (except Audi has the S3 Sedan and Mercedes-AMG has CLA45).
Why? European market is a sharp contrast to other markets such as North America, and sedan market in Europe is just ignored by many carmakers. And, Europeans exaggeratedly preferring small two-box hatchbacks and versatile estates to big-boot three box sedans, thus making many European carmakers and other few carmakers (such as Ford, who never wanted to spruce up Focus sedan) forgetting about importance of making a high-performance versions of their small sedans in their entire global range. Some even didn’t know there is still a market potential for those small fast sedans for the global market.
Global preferences on sedan bodies has pulled in some few European carmakers to expand their small car range as a response. However, due to European Galapagos syndrome of excessive focus on hot hatches, only a few responded to the dying sports sedan market as well. So far, only Audi and Mercedes-Benz have responded to Subaru’s sedan-only WRX STI with their Audi S3 Sedan and Mercedes CLA45 AMG, while other European carmakers didn’t care about it, not making powerful versions of their small sedans. For example, Renault’s Fluence didn’t receive RS treatment.
The excessive focus on hot hatches can make a negative impact for the European carmakers, if they wanted to go on global market. If they want to stop this syndrome, the only quick real aid is to make a high performance small sedan for the global market, or making a combined liftback sedan instead of separate versions, and making a high performance version of it.
EXTRA NOTE: Three-box liftback sedans can be a better aid since this cuts down costs on making separate versions, and can be very useful on small cars. This was largely used on large luxury hatchbacks but there are only very few liftback sedans in the small car market (We are looking at you, Skoda Octavia and Rapid).