An industry report suggests that the popularity of SUVs and crossovers may be waning for the first time in 20 years.
According to a new industry report from Automotive News, high prices and the desire to be different may have contributed to the sedan's increased popularity among American buyers during the first quarter of 2023, marking the first time in 20 years that SUV popularity didn't grow.
The Automotive News Research & Data Center found that sedan, coupe, convertible, hatchback, sports car, and performance car models represented 21.4% of the 3.6 million new vehicles sold in America during the first quarter of 2023, up from 19.6% in the last quarter of 2022.
That is a small improvement, but it's good news, especially for road safety. It also means that it's too soon to call if this phenomenon will become a trend or if it's an anomaly caused by inventory or other issues. But there are signs that the industry's likes and dislikes are changing.
Earlier this year, Toyota execs predicted that the average price of new cars would swell past $50,000 this year; is the comeback of the car against the crossover, SUV, and truck down to the fact that smaller cars are simply more affordable?
Hyundai told Automotive News that "increased availability and consumers seeking more attainable new vehicle prices" helped drive increased demand for the Elantra and Sonata. Price certainly plays a factor, then.
"It seems like we're approaching some kind of natural boundary, where SUVs [and crossovers] are about 60% of the market, and pickups and vans and trucks are about 20%, and cars are about 20%," said Tyson Jominy, the VP of data and analytics at J.D. Power. However, he added that it would be a while until we "steady out," as supply chain issues and inventory shortages may have skewed the market somewhat.
At Volkswagen, the decision to abandon sedans is backfiring. According to the senior VP of sales at Volkswagen of America, Hein Schafer, "The dealers are really desperately crying out to get Jetta [back] on the showroom floor, despite the fact that we've got a Taos that covers that $25,000 price point," adding, "We still have people coming out of sedans and wanting sedans again. And at some of our stores, where there have been no Jettas available, that customer hasn't bought [a crossover] but has gone off and bought another sedan from another brand."
Genesis noted the disinterest in sedans and coupes from rival automakers as one of the big reasons it will never abandon those cars. For Genesis customers, price is not as much of a driving factor, so why is the brand sticking with sedans?
Industry experts believe that some people will always simply prefer a sedan over a crossover or SUV. There is also a growing portion of younger people who, like their ancestors before them, don't want to drive the same sort of vehicle that their parents did. Naturally, geography also plays a role. For example, Californians buy a larger percentage of cars versus light trucks than buyers in other parts of the country.
Toyota Motor North America's senior VP of product for battery electric vehicles, Cooper Ericksen, says, "The same reasons why sedans have been successful for 50 years is why they're successful with BEVs: because they're more aerodynamic, they have better fuel economy, they have better range, they're less expensive to manufacture, they're easier to park and get around."
J.D. Power's Dominy believes that every automaker will eventually have a sedan in its lineup, but we won't get back to OEMs offering several versions of similar body styles.
We've long extolled the benefits of sedans over SUVs. Now it's up to automakers to offer more of them once again.
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