when u manufacture a car, u have to do research and fill what is the market requirement.
Nissan March/Micra and Toyota Vitz/Echo/Yaris started this trend back in late 90s..with small compact supermini size on the otside, but big on the inside. such formula prooved to be a success with the consumer, resulting increasing sales. since then, other manufacturers had began the race to woo consumers.
latest we can see now is perodua Myvi, put side by side with Perdana V6..and the Perdana looks like a miniature.
even Waja when put side by side with Merc C class W202, the Merc does look relatively small.
this happened in 1980s too..
take Corona TT132 1770cc and Galant E12 super touring 1755cc and put them side by side, and even though they are looking for the same customer, but galant is way bigger than corona. of course, corona TT132 dated back in 1979 where Galant E12 was on sale in 1984.
the secret is...giving what customer want instead of forcing customer to accept manufacturer's design.
which explains why proton cars (waja, gen2) are not succesful in overseas market.
they enjoy good sales in malaysia due to lower price than competitor as well as good finance package available.
back to design issue, nowdays car designers design cars from inside out and the not other way round. meaning, they will get the cabin room as comfortable and roomiest 1st before they even began with exterior design.
one way to imagine is, get a chair and sit on it. then from there, u imagine where wud be the comfortable height of the steering wheel, the pedals, dashboard and controls, gear lever and location of ICE to a point that u feel natural and part of the car.
many ppl found it to be more comfortable wth higher seating position, where the legs dont get crammed after seating too long and they enjoy a better driving view in order to better control their cars. which explains why nowadays cars are increasing in height.
thanx to electronics like VSC from toyota, ASC+T from BMW and also ESP from Mercedez, higher cars (with higher centre point of gravity) does not face much problems with stability.
even though we can see cars are getting bigger nowadays, (where 2004 Honda City is bigger than 1988 EH Civic) companies like Toyota are quick to realise this problem and had stopped doing so. as we all know, Toyota has so many JDM cars in every category so if Corolla is bigger than Corona (now Avensis) than who would buy Corona? Corolla Altis (meant only for Asean) is big in dimension due to market preference, but the similar JDM Corolla has smaller body (even though same wheelbase).
my 2 cents :D