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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.