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It's difficult to pinpoint exactly when Europe lost the plot at building small cars. A few decades back, many fine and interesting small cars dotted Europe's streets, none better than the Mini. Cars, like all consumer goods, are reflections of the society they were born into.

The Mini was conceived in the wake of the Suez crisis, when petrol parsimony seemed sensible. It was possibly the most significant car of the past 40 years, because it pioneered the front-drive, transverse-engine layout, which is now the small- and medium-sized hatchback norm.

Other great small cars included the Fiat 500. It was cheap (it had to be, as it mobilised the Italian peasantry), small (to fit through narrow Italian urban streets) and attractive. The Citroen 2CV was also a marvellous car, even though in its latter years it was derided as some sort of semi- subversive transport for sandal-wearing kooks.

There is no small car in Europe today as cleverly conceived as these old-timers. Yet the case for modern iterations of them has never been greater. Our towns are even more congested, but in the main, the small cars served up are little more than shrunken versions of bigger hatchbacks. We are now - belatedly - starting to see some sub-supermini cars, but none is really that small.

In South-East Asia there is still an interesting variety of baby cars, all made in Japan, where they are categorised as K (forkei-jidosha, or light) cars. They are popular because they are cheap, fuel-efficient, high-tech, surprisingly roomy and small. Some of these K cars are starting to hit European shores, including the Daihatsu Move.

None of these K cars is as significant, in motoring history, as the Mini or the Cinquecento and, for their time, none is as good. But Japanese makers still seem more in touch with the big issues of the day than Europe's makers. The K car concept makes just as much sense in traffic stifled European city streets as it does in Japan. But, other than Fiat and its modern Cinquecento, no other European maker seems to have got the message.

Even makers who are thinking small, seem obsessed with turning their new-generation babies into pricey bijou boxes, rather than the space-efficient transport offered by the K cars. Rover's new Mini, on sale in 2000, follows the same intellectually vacuous philosophy. Europe was watching for an intelligent, new generation small car lead. Instead, it got an expensive piece of "designer" jewellery.