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most times when new cars start very cheap its either because they have no options or the company knows the car is crap and wont last or won't bring in a lot of buyers. just look at the ford aspire of a few years back or the pontiac aztek
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It is a subcompact car, which means it is even smaller than a Civic. It's still roomy, but is shorter and skinnier than the civics are. It is also powered by a smaller, less powerful engine than the civic, but gets better gas mileage. The car is mainly used by people still wanting decent space while getting good gas mileage (30+mpg). Its an extremely good value, just don't expect it to be a speed demon.
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