The new Polo is as large as the Golf used to be and the new Golf, especially the station is as large as the early model Passats. This is mostly an arms race, not so much on size as on crash safety, to maintain those precious stars car models creep up in their outside dimensions. Interiors are fairly static.
Back in the 1980s I considered the VW Golf a small car, but not anymore. Not sure if it's gotten larger since then, or my view of a small car has shrunk. But I don't think the Tesla 3 is that much larger than a Golf.