In America, Crossovers Are Hot, Sedans Are Not

In America, Crossovers Are Hot, Sedans Are Not

In a market that was down 2 percent last year, how did Hyundai’s US sales fall 14 percent? The company’s fluidic sculpture design and rock solid reliability made sales soar circa 2010. But it relied too much on sedans, which are falling out of favor. Hyundai’s SUV/crossover fleet was up 12 percent last, but Hyundai’s sales were 63 percent sedan, 37 percent SUV. That’s almost the exact opposite of the US market in 2017.

Hyundai is not alone. The shift from sedans and hatchbacks (“cars” in industry parlance) to SUVs, crossovers, and pickups (“trucks”) appears to be a long-term trend, helped along by gasoline prices much lower than earlier in the decade, and making fuel seem comparably cheap.

The Impact of Buying SUVs and Not Cars

When you buy an SUV or crossover, it’s taller and heavier than a sedan. Fuel economy is lower, but the driver sits up higher. Research shows women especially feel they see more and feel more in control of the driving situation. Height makes an SUV tippier, but the rollover risk has been reduced sharply with electronic stability control, which has been mandatory since 2012. Buyers, men and women both, attribute a greater sense of ruggedness to an SUV, whether true or not. They’re more likely to have all-wheel-drive and higher ground clearance so they’ll be better in snow, but mostly by virtue of the all-wheel-drive. A cargo bay holds more than a trunk, but unless there’s a cargo screen, thieves can eyeball what’s inside. When the rear suspension thunks, it isn’t muffled by the separate trunk.

When a vehicle gets a hybrid version, it’s easier to bury the battery pack under the load floor of a crossover than up against the rear seat of a sedan. This takes up trunk space, and it removes the possibility of folding rear seatbacks. As hybrids go from nickel-metal hydride to lithium ion batteries, some of the crossover advantage goes away, but then it becomes possible for a plug-in hybrid to have the battery pack under the load floor.

Honda Accord is the best midsize sedan. Its reward: 7% slump in sales last year.
Honda Accord is the best midsize sedan. Its reward: 7% slump in sales last year.

America’s Best Sedan Costs $249 a Month

How tough are things in the sedan market? The very best mainstream sedan you can buy today is the Honda Accord. It’s ’s reigning Car of the Year, and was also chosen North American Car of the Year at January’s North American International Auto Show. The Accord wins virtually every comparison test versus the Toyota Camry, Nissan Altima (due for a new model later this year), and Hyundai Sonata (main image). Industry trade weekly Automotive News reported that a base Accord leases for as little as $250 a month ($3,200 down), but it’s being outsold and outleased by the Camry ($220 a month, $2,000 down) and also by the aging Altima. In other words: a) all cars are good at a base level, and b) money talks.

Take a look at what sold best in 2017. These 10 account for a quarter of all vehicle sales in the US.

2017 Top-Selling Vehicles

1. Ford F series pickup, 896,764, +9 percent vs. 20162. Chevrolet Silverado pickup, 585,864, +2 percent3. Ram pickup, 500,723, +2 percent4. Toyota RAV4 SUV, 407,594, +16 percent5. Nissan Rogue SUV, 403,465, +22 percent6. Toyota Camry sedan, 387,081, flat7. Honda CR-V SUV, 377,895, +6 percent8. Honda Civic sedan, 377,286, +3 percent9. Toyota Corolla sedan, 329,196, -13 percent10. Honda Accord sedan, 322,655, -7 percent

The top five are three pickup trucks and two SUVs/crossovers, followed by four sedans and another crossover. Each accounts for at least 2 percent of all vehicle sales. The F Series accounts for one in 20 sales. Camry, the best-selling sedan, was flat last year (-0.3 percent or 1,500 units), and Accord, the best sedan, was down 7 percent 22,570 units.

Note that for both Toyota and Honda, their compact crossover outsold their compact sedan. The same holds for the Chevrolet Equinox crossover over the Cruze sedan. For Nissan and Ford, their Rogue and Escape crossovers outsold their Sentra and Focus sedans by almost 2-1. Hyundai was an exception, where the Elantra sedan outsold Tucson by more than 70 percent last year.

Gasoline is selling near its historical average and is much cheaper than earlier in the 2010s decade.
Gasoline is selling near its historical average and is much cheaper than earlier in the 2010s decade.

Does Our Lust for SUVs Hurt CAFE?

As we noted recently in our story on the fight between California and the Trump administration Environmental Protection Agency over corporate average fuel economy (CAFE) standards, when fuel prices are lower, Americans vote for larger vehicles. Part of this is due to our healthy appetite: The average American male weighs about 25 pounds more than in the 1960s (think John Kennedy versus Donald Trump), and some have trouble fitting in a compact car. In seeking to roll back the 2021-2025 standards set during the Obama administration, the current EPA administration makes the point — correctly — that Americans aren’t buying into smaller, more fuel-efficient cars. But emissions have two parts: One is the pollutants that are harmful to people, animals, oceans, etcetera; the other is CO2 (carbon dioxide) emissions that are generally considered to be the cause of global warming, which is generally considered to be fact, and that CO2 is produced in direct proportion to how much fossil fuel is burned in cars, as well as buildings, locomotives, planes, and ships.

At the same time, when buyers switch from sedan to crossover, they often downsize — for instance, going from midsize sedan to compact SUV, without much if any loss in rear-seat comfort. Virtually every compact crossover redesigned in the past 2-3 years has enough back seat room that two adult couples can travel comfortably for several hours.

Sales of trucks and crossovers first surpassed cars in 2007. Cars regained the upper hand when gas pushed past $3 a gallon. But trucks regained majority market share in 2012. The number has been steadily rising, and is now at 65-35 trucks.

2019 Kona, one of several new or refreshed Hyundai crossovers.
2019 Kona, one of several new or refreshed Hyundai crossovers.

How Automakers Respond: Make More Crossovers

Hyundai is only one example of an automaker overly dependent on sedans. It’s responding with new and redesigned crossovers. The new subcompact 2019 Hyundai Kona, now shipping, has gotten good reviews. The compact-almost-midsize 2019 Hyundai Santa Fe (the two-row version) is all new, shipping shortly with a raft of standard safety gear, and has the potential to be a bestseller. The 2019 compact Hyundai Tucson gets a new engine and safety gear, and a three-row Hyundai SUV is planned that will be larger than the current three-row Santa Fe XL.

Over the last decade, crossovers and SUVs have been re-engineered for a more compliant ride, a quieter interior, and higher-end trim lines that match the best sedans. Virtually every automaker has crossovers. Porsche’s SUVs handily outsell its sports cars and sedans. Bentley has a quarter-million-dollar SUV, the Bentayga.

Most automakers have already made the leap. Ford, Chevrolet, and FiatChrysler are majority truck because they already have a pickup in the line that sells at least 500,000 units. Subaru sells three crossovers for every passenger car. Volvo, resurrected under Geely, is at 2-1 crossovers. Cadillac is riding a combination of older SUV designs, such as the Escalade, along with newer crossovers such as the XT5 (with a compact XT4 pending), so that trucks outsold cars 106,162-50,278 last year. Unless there’s a huge surge in the price of gasoline, past $3.50 a gallon, the SUV is likely to outsell the passenger car.

It’s also likely some sedans will be discontinued, especially full-size models. Automotive News and the Wall Street Journal have both reported Ford may discontinue the Taurus and subcompact Fiesta, and Chevrolet will discontinue the Impala (arguably the best full-size car when it came out in 2013) and subcompact Sonic.

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