Mrs. Bugbear and I own a light SUV specifically a Ford Freestyle which has been rebranded the Taurus X. For camping and transporting kids and some of the various other activities we engage in the Freestyle is a practical vehicle. We also own a Mazda 3 which I commute to work in since I drive farther and it is more fuel efficient. Let's compare my SUV with the aforementioned SmartCar. For the sake of mathematical simplicity lets assume that the SmartCar gets 50mpg and the SUV gets 25mpg, which are close to the actual values.
Scenario One: Soccer Practice
I'm taking 5 children to soccer practice 5 miles away. To travel 5 miles takes 0.2 gallons of gas in the SUV and .1 miles in the SmartCar. SmartCar is more efficient, except to transport 5 children requires 5 Smartcars and takes 5 adults away from what might be other productive activities. Total gas consumed .2g using the SUV and .5 gallons for the SmartCar. Conclusion, buy SUV.
Scenario Two: Commuting to Work
I travel ten miles to work the SUV takes .4 gallons and the SmartCar takes .2 gallons. Conclusion, buy SmartCar.
Now being an engineer I have writ deep in my soul a phrase from Heilein's The Moon is a Harsh Mistress: "There ain't no such thing as a free lunch" or "TANSTAAFL". The obvious choice to me is that you need both, which is why my next car will likely be a Honda Fit or other small fuel efficient car.
North American's buy bigger cars because our countries are bigger than the postage stamped sized prinicpalites of Europe and much more sparsely populated. I had the delightful experience of meeting a girl from Sweden while I was in university. She once asked me how far I from home I was and I told her that I had driven 19 hours to get to school and that I hadn't left my home province. IIRC she told me that if she'd driven that long she'd have crossed three countries on her way from Stockholm to Paris.
I've also read an article about the cost in lives of small cars and I think there are some holes in that argument and I'll try to poke some holes in that in a future post.