DETROIT, May 2 — Family sedans like the Toyota Camry and Honda Accord are losing ground this year as American families and empty-nest baby boomers find they would rather handle life’s daily chores in a crossover.
Midsize sedans remain the single largest segment of the US auto industry. But their share of the industry has shrunk this year, alongside a gain for vehicles like the Ford Escape, executives and analysts said yesterday.
“While the segment is still growing year-over-year, it’s nowhere near what it was growing last year as the industry was launching a lot of new midsize cars,” Bill Fay, the US head of the Toyota brand, said during a call with reporters to discuss US auto sales in April.
US auto sales are being propelled by pickup trucks and sport-utility vehicles, as shown by US auto sales in April by major automakers.
Crossovers, which are SUVs built on a car-based platform, are appealing because they offer more space for groceries and golf clubs than the typical sedan, and they are easier for people to enter and exit. And fuel mileage is improving.
Perhaps most importantly, the price gap has narrowed between midsize sedans and compact crossovers like the Ford Escape, and the Toyota RAV4 and the Honda CR-V.
A small crossover costs just US$1,300 (RM3,900) more than the typical family sedan, according to Kelley Blue Book. Excluding state taxes, this amounts to less than US$20 in monthly payments in some cases.
“Fundamentally, both serve the family market,” said Mustafa Mohatarem, General Motors chief economist.
“Midsize cars have gotten smaller and more expensive, because of a variety of factors,” he said. “People are switching to crossovers, because they satisfy the family needs very well.”
The closing gap in price is encouraging some buyers to consider paying more for a crossover for the additional space and flexibility, said Jeff Schuster, senior vice president of forecasting with LMC Automotive.
“When there was a further separation between the two, there weren’t so much a substitution for each other,” he said.
Midsize sedans accounted for 17 per cent of the US auto market during the first quarter, compared with 17.7 per cent during the same period last year, according to LMC Automotive.
The shift has hit Japanese automakers, which dominate the sedan segment. Camry sales fell 14 per cent in April as overall US auto sales rose 8.5 per cent. Sales of the Accord, which Honda redesigned last year, fell 5 per cent.
The falloff in sedan sales is also due to tough competition in the segment, where several top-selling models have been recently redesigned, including the Ford Fusion.
Midsize sedans also got smaller incentive during the month. Incentives on mid-size sedans averaged US$2,098 in April, nearly 10 per cent lower than industry incentives overall, according to data from Edmunds.com.
Toyota Motor Corp’s April sales fell short of estimates in due in part to tighter competition for the Camry in this bread-and-butter segment, said KBB analyst Alec Gutierrez. Camry is Toyota’s top-selling vehicle in the US market.
“Camry will likely be quite strong but not as strong as if it were not facing Fusion, Altima and Accord,” Gutierrez said. — Reuters