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Industry News: Midsize Sedans Are Experiencing Sales Freefall

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The automotive industry in the U.S. has been enjoying one of the best years in terms of sales. But one segment is seeing a drop in their sales. That segment is the midsize sedan.

Automotive News reports that the demand for midsize sedans is at a five-year low. The numbers tell this sad story. In the first quarter of 2016, sales of midsize sedans dropped 3.4 percent. The second quarter saw sales dropped 13 percent, while the third quarter saw a whopping 21 percent drop. For the month August, all 16 midsize sedans saw an average drop of 27 percent. The Ford Fusion, Hyundai Sonata, Kia Optima, and Nissan Altima reported drops of over 30 percent.

Automakers have been throwing money on the hoods of their midsize sedans to try and ignite sales. But this tactic isn't working.

Why are midsize sedan sales down? It comes down to consumers wanting crossovers and SUVs.

"It doesn't matter how deep you discount the leisure suit and bell-bottoms -- nobody's going to buy them if they're not fashionable. I don't think they're ever going to go away, but there's a lot more people who don't consider them anymore," said Eric Lyman, vice president of industry insights at TrueCar. 

The outlook for midsize sedan sales doesn't look good as we enter fall and winter.

"That larger sedan buyer just sees more value in the SUVs or CUVs," said Mike DeSilva, co-owner of Liberty Hyundai in Mahwah, N.J. "That's just where the activity is. And heading into the end of summer and going into winter, we're really going to get into SUV season."

Source: Automotive News (Subscription Required)


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Very true, most people are fatter than they used to be, getting up out of a low sitting sedan is not what people want to do when they can just slide their rump in across the seats in a CUV. Taste has gone to fully support this but more than anything, people want space and the sedans do not give it compared to a CUV or SUV. It will be interesting to see how people support EV's like the bolt. Does the spacious interior drive sales or not?

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It is good that Tesla brought out the model X....

The Fusion and Altima are not cars that are high on my list any ways...Wish jeep had done a better job with reliability in the Renegade, I would love to own one.

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One problem is there are 16 mid-size sedans in one segment.  This is a huge segment, but you have so many players in it, some will fade away like the Chrysler 200 and Dodge Dart which small, but is dropping off in sales too and discounts won't save it.  There is a war of attrition going on in this segment, only the strong will survive.

A 2nd problem is outside of Subaru, it is hard to find all wheel drive on a mid-size or small sedan, but every crossover offers it, and the marketing people have convinced buyers that AWD = Safety and that they need it.

And most people aren't driving like they are on the Nurburgring, to plod along in traffic or around town a crossover handles just as well as most mid-size sedans, and you get the added space and higher seating position.  

And related to that, think of some of the crap sedans that people are trading in now.  If you have an 2006-2009 Malibu, Fusion, Sonata, W-body Impala, etc, and go drive a 2016 crossover, the 2016 crossover probably rides and handles better, might even get better gas mileage than that V6 family sedan of 10 years ago.  The consumers are just flocking to crossovers like crazy.

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4 hours ago, smk4565 said:

One problem is there are 16 mid-size sedans in one segment.  This is a huge segment, but you have so many players in it, some will fade away like the Chrysler 200 and Dodge Dart which small, but is dropping off in sales too and discounts won't save it.  There is a war of attrition going on in this segment, only the strong will survive.

A 2nd problem is outside of Subaru, it is hard to find all wheel drive on a mid-size or small sedan, but every crossover offers it, and the marketing people have convinced buyers that AWD = Safety and that they need it.

And most people aren't driving like they are on the Nurburgring, to plod along in traffic or around town a crossover handles just as well as most mid-size sedans, and you get the added space and higher seating position.  

And related to that, think of some of the crap sedans that people are trading in now.  If you have an 2006-2009 Malibu, Fusion, Sonata, W-body Impala, etc, and go drive a 2016 crossover, the 2016 crossover probably rides and handles better, might even get better gas mileage than that V6 family sedan of 10 years ago.  The consumers are just flocking to crossovers like crazy.

Yeah, noticed most of the sedans are are moving here (Fusion) are because of the good leases out here. One thing I have noticed is that small sedans are taking a beating. Focus and new Cruze seem to be taking the brunt. But at least the Focus has the hatchback, while Chevy is only going to provide a "limited" amount of hatchback Cruzes, mostly being built as high end ones. Bonehead move on GM's part....I would jump on a no frills Cruze hatchback IF they offered one....

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It's just wagon madness all over again, but this time they're a bit taller and have AWD.  AMC Eagle and the Dodge Colt Vista were ahead of their time. 

Only Subaru can really sell wagons these days, but over at Chevy, give the Sonic hatchback a 2 inch lift, AWD, and a new name, and suddenly Chevy can sell basically the same vehicle for $5k more. (The Trax shares platform, engine, transmission, and a substantial chunk of its interior bits with the Sonic).  Lux up the interior a bit, use nicer soft touch buttons from the Astra, and some active noise control, and Buick can sell it for $10k, $15k, or $20k more. 

Do you really blame auto manufacturers for going this route?

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FCA's already killed the 200 and Dart, I've heard rumors the 300 may not get redesigned. On their latest five year plan update there's mention of Chrysler getting a couple crossovers. That leave just the Charger, Challenger, and apparently a convertible (Barracuda) for cars.

 

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11 minutes ago, Intrepidation said:

FCA's already killed the 200 and Dart, I've heard rumors the 300 may not get redesigned. On their latest five year plan update there's mention of Chrysler getting a couple crossovers. That leave just the Charger, Challenger, and apparently a convertible (Barracuda) for cars.

 

I wish Sergio would just pull the rip-cord on his golden parachute already....

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Seriously, in the last several years he's gone from being a leader to admire to one you can't figure out what on earth he's doing and how that seems like a good idea.

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Fusion is doing okay because it is a good product and because Taurus is basically dying.  Chevy has too many sedans, they can probably consolidate too.  

These crossovers were once though as more of a premium car or more desireable I think because not as many people had them.  When 60% of the vehicles sold are crossovers and they are a commodity just like the CamCord I wonder if they will still be thought of that way.

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15 hours ago, Drew Dowdell said:

It's just wagon madness all over again, but this time they're a bit taller and have AWD.  AMC Eagle and the Dodge Colt Vista were ahead of their time. 

Only Subaru can really sell wagons these days, but over at Chevy, give the Sonic hatchback a 2 inch lift, AWD, and a new name, and suddenly Chevy can sell basically the same vehicle for $5k more. (The Trax shares platform, engine, transmission, and a substantial chunk of its interior bits with the Sonic).  Lux up the interior a bit, use nicer soft touch buttons from the Astra, and some active noise control, and Buick can sell it for $10k, $15k, or $20k more. 

Do you really blame auto manufacturers for going this route?

They are basically selling highly profitable lifted hatchbacks, so no, I cannot blame them at all.

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21 hours ago, Drew Dowdell said:

I wish Sergio would just pull the rip-cord on his golden parachute already....

Oh, I would go out on a limb and say we'll see him yanking that string with all his might when gas prices move beyond $2.50 to $3 a gallon again.

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On 9/6/2016 at 10:43 PM, Intrepidation said:

Seriously, in the last several years he's gone from being a leader to admire to one you can't figure out what on earth he's doing and how that seems like a good idea.

Yep....

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On 9/6/2016 at 9:42 PM, Drew Dowdell said:

It's just wagon madness all over again, but this time they're a bit taller and have AWD.  AMC Eagle and the Dodge Colt Vista were ahead of their time. 

Only Subaru can really sell wagons these days, but over at Chevy, give the Sonic hatchback a 2 inch lift, AWD, and a new name, and suddenly Chevy can sell basically the same vehicle for $5k more. (The Trax shares platform, engine, transmission, and a substantial chunk of its interior bits with the Sonic).  Lux up the interior a bit, use nicer soft touch buttons from the Astra, and some active noise control, and Buick can sell it for $10k, $15k, or $20k more. 

Do you really blame auto manufacturers for going this route?

Yeah.. I was about to say that the Tall Sonic U speak of is already being sold as the Trax/Encore. Two vehicles that are doing quite well in sales right now. The latter taking a hit because I'm betting the Envision is grabbing some of its sales. As much as my ex loves her Encore.. when she saw the Envision recently.. she instantly asked me if I would consider helping her trade. I told her to wait a few months for the vehicle to have a more choices.

 

 

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On 9/6/2016 at 10:56 PM, smk4565 said:

Fusion is doing okay because it is a good product and because Taurus is basically dying.  Chevy has too many sedans, they can probably consolidate too.  

These crossovers were once though as more of a premium car or more desireable I think because not as many people had them.  When 60% of the vehicles sold are crossovers and they are a commodity just like the CamCord I wonder if they will still be thought of that way.

 

 

I agree with this. Walking into a dealership one will see the Impala, an exemplary vehicle, on the large side.. and new Malibu.. perfectly sized in the middle.. and I'm also betting good money that they are picking the Malibu. Seriously. Look at these two and U would swear that they are the same size, with one having a cheaper price. They have virtually the same WHEELBASE. Look at the sales. The Malibu is up 14.4% while the Impala is down 11.8% YTD. The next Impala would be a better fit merging itself with the Chevy SS/Caprice. It could then do other HD duties without bumping heads with the Malibu. I declare again.. the next Impala should be Omega (or L-Alpha) based, rwd/awd, and sport a V6 and V8 only. 

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9 minutes ago, Cmicasa the Great said:

Yeah.. I was about to say that the Tall Sonic U speak of is already being sold as the Trax/Encore. Two vehicles that are doing quite well in sales right now. The latter taking a hit because I'm betting the Envision is grabbing some of its sales. As much as my ex loves her Encore.. when she saw the Envision recently.. she instantly asked me if I would consider helping her trade. I told her to wait a few months for the vehicle to have a more choices.

 

 

She'll want to wait till at least the 2017 model.  The 2016s that are sitting on lots today don't have Apple CarPlay nor Android Auto. 

I think the Encore is taking a hit because it's about to get its refresh. 

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Just now, Drew Dowdell said:

She'll want to wait till at least the 2017 model.  The 2016s that are sitting on lots today don't have Apple CarPlay nor Android Auto. 

I think the Encore is taking a hit because it's about to get its refresh. 

Yeah. I told her the same. The Encore is well loved by her and the kids, but the larger Envision is very desirable as well.. especially to those who have awaited a larger tweener not as big as the Enclave.

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12 minutes ago, Cmicasa the Great said:

Yeah.. I was about to say that the Tall Sonic U speak of is already being sold as the Trax/Encore. Two vehicles that are doing quite well in sales right now. The latter taking a hit because I'm betting the Envision is grabbing some of its sales. As much as my ex loves her Encore.. when she saw the Envision recently.. she instantly asked me if I would consider helping her trade. I told her to wait a few months for the vehicle to have a more choices.

 

 

It's overly simplistic to say it.... but a $35k loaded Encore is really just a $15k Sonic with about $10k in upgrades.  GM's gotta be making lots of profit on these cars.

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1 minute ago, Drew Dowdell said:

It's overly simplistic to say it.... but a $35k loaded Encore is really just a $15k Sonic with about $10k in upgrades.  GM's gotta be making lots of profit on these cars.

Billions. The dealership we bought the Encore from was a Chevy/Buick store. The Trax and Encore were sitting right next to each other. The exterior is certainly different.. and the interior is easily seen as an upgrade. I honestly bet good money that the upgrades don't even cost them $10K. That being said.. I'd put the Encore interior on Acura level at this point

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2 hours ago, Cmicasa the Great said:

Billions. The dealership we bought the Encore from was a Chevy/Buick store. The Trax and Encore were sitting right next to each other. The exterior is certainly different.. and the interior is easily seen as an upgrade. I honestly bet good money that the upgrades don't even cost them $10K. That being said.. I'd put the Encore interior on Acura level at this point

The Envision interior is even a bigger step above the Encore / Acura.

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2 hours ago, Cmicasa the Great said:

Billions. The dealership we bought the Encore from was a Chevy/Buick store. The Trax and Encore were sitting right next to each other. The exterior is certainly different.. and the interior is easily seen as an upgrade. I honestly bet good money that the upgrades don't even cost them $10K. That being said.. I'd put the Encore interior on Acura level at this point

Depends on the Acura.  I would say that no Acura currently built exceeds the 2017 Encore on interior quality, but there are more than a few Acuras that don't even measure up to it, including those priced well above the Encore's entry point. 

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Acura interiors are on par with Honda interiors for the most part.  But an MDX is nicer than an Encore, that isn't really close.

Buick could use a 4th crossover in between Envision and Enclave, GMC needs a crossover below Terrain, they could get 10 crossovers/SUVs in that dealership channel.  

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31 minutes ago, smk4565 said:

Acura interiors are on par with Honda interiors for the most part.  But an MDX is nicer than an Encore, that isn't really close.

Buick could use a 4th crossover in between Envision and Enclave, GMC needs a crossover below Terrain, they could get 10 crossovers/SUVs in that dealership channel.  

I am gonna have to disagree with you. Coworker has a new MDX and I compared my other Coworker who just traded in his leased Encore for a new Encore and big difference. The current Encore beats the interior on the current selling MDX.  It really is surprising and nice. MDX does not win here. It truly boils down to what you like more than anything but to me, Encore wins over the MDX in quality of interior.

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This:

2014-Acura-MDX-SH-AWD-front-interior.jpg

 

Is better than this:

2017-buick-encore-inline2-2-photo-667242

 

I wouldn't buy an Acura, and I think the MDX interior lags behind any German or the Lexus RX or even XT5, but the MDX is better than an Encore.  Look at all the plastic in the Encore, the lack of a center console, lack of real wood or aluminum trim, etc.

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