United Kingdom

I think the key is "not much margin" - they just aren't making enough profit and presumably don't want to put the price up.

The shift towards bigger cars has been noted as a Europe-wide phenomenon, albeit we're nowhere near the US scenario where a Ford 150 pickup truck is the best-selling car: https://www.economist.com/europe/2023/06/21/a-farewell-to-small-cars-the-industrial-icons-that-put-europe-on-wheels

Tl;dr / if you don't have Economist access - the reasons they give for this shift are: it's easier for manufacturers to pass on costs with bigger cars; there are fewer good small electric cars anyway, and electric is becoming increasingly important given forthcoming climate policies; modern booster seat regulations have pushed families towards larger cars; and people have more money nowadays so tend to buy bigger cars.

I don't think we'll ever end up in a US situation though given how our towns and cities are designed. I hugely value having a small B-segment car (e.g. Fiesta/Polo/Fabia/Yaris) for parking in London and don't think I could see myself going larger than a C-segment (e.g. Focus/Golf/Octavia/Corolla) in the future unless I moved fully out of London.

They likely are - there likely never was much margin in them.

The reason manufacturers are pushing SUVs so hard is that they are cheap to build but can be sold at premium prices.

I'm from the Netherlands but buying a new car here.is crazy. It's so much more than buying second hand. I think lease cars are most of the new models.

Corporate greed.

It's mainly because of emission standards. Those require extra technology that serves up the cost. That makes smaller cars more expensive and this it's attractive. This will change, once batteries become cheaper. Putting together a small EV is much easier and you don't have to worry about emissions. We will see that within the next five years or so.