Family sedans reach low point as SUVs take over
FBN's Jeff Flock talks to Woody Woodring, of Woody Buick GMC, about the higher demand for SUVs and trucks over cars.
Once the most popular type of vehicle in America, midsize sedans have reached a low point this year amid growth in SUV sales, according to analysis by Edmunds.
The car-shopping website said Tuesday family sedans have contributed 10.7% of U.S. new-vehicle sales so far this year. That marks the segment’s weakest market share since Edmunds began tracking sales data in 1991.
Midsize cars, including the Toyota (NYSE:TM) Camry and Ford (NYSE:F) Fusion, have dropped to fifth place among the industry’s best-selling segments. They were ranked first as recently as 2014 but have since been replaced by compact SUVs. Large pickup trucks, midsize SUVs and compact cars also hold larger shares of the U.S. market.
Jessica Caldwell, Edmunds executive director of industry analysis, explained that car shoppers can buy a roomier SUV for a similar price as a sedan without making a sacrifice in fuel economy.
“While it’s common for consumer tastes to change over time, it’s surprising to see just how quickly shoppers have made the switch from sedans to SUVs,” Caldwell said.
The decline of midsize sedans is particularly troublesome for Honda (NYSE:HMC) and Toyota. The Japanese automakers are rolling out new versions of the Honda Accord and Toyota Camry at a time when sales of comparable crossovers are growing. Accord sales made up nearly 30% of Honda’s total U.S. sales three years ago, Edmunds noted. This year, it’s down to 22%.
With competition heating up, Honda and Toyota moved to sportier sedan designs to attract buyers in a segment that has lost much of its luster.
“As the pool of buyers shrinks, you have to put out that much better of a product to keep your share of the segment, and that’s exactly what Honda and Toyota are trying to do with the new Accord and Camry,” Caldwell said.
Still, Edmunds doesn’t expect family sedans to mount a full comeback, even if gas prices rise. It found that 23.5% of midsize sedan owners who trade in their vehicles purchase a small SUV.
Sales of the Camry, the most popular midsize sedan, are down 7.1% through the first eight months of 2017. Honda has sold 4.5% fewer Accords over the same period. Across the industry, U.S. sales of new passenger cars have dropped 11.3%, while light trucks—including pickups, SUVs and vans—have climbed 3.3%, according to Autodata.