Do Americans even want cars anymore?
Thanks to low gas prices, people are trading their small cars for large trucks and SUVs. Back in 2013, the US auto market was split between cars and trucks, but trucks have seen a massive boom in popularity. Automotive News reports that through May 2018, trucks outsold cars by two-to-one. Automakers like Ford are now changing their strategies, killing off small sedans and hatchbacks to focus on SUVs and mid-size trucks like the upcoming Ranger. Many experts predict that truck sales will continue to grow well into the next decade.
As trucks increase in popularity, cars are experiencing their worst sales year in decades. The US auto market is on pace to sell 5.3 million cars this year, the fewest since 1958. Data from Edmunds shows that 53% people who trade in their car replace it with another car, not an SUV or truck (down from 68% last year). "With so many consumers taking advantage of low fuel costs to test out larger SUVs and trucks, which benefit from significantly better fuel economy than their predecessors, it will be harder and harder to convince anyone who has made a recent truck or SUV purchase that reverting back to a car would make any sense," said Ivan Drury, Edmunds senior manager of industry analysis.
Some automakers are better equipped to handle this change in consumer trends, while others may start to feel a crunch. Mitsubishi has shifted its lineup to focus on crossovers, and Ford has discontinued sedans and hatches all together. Other companies like Chrysler and Hyundai's Genesis brand don't have any crossovers, and could suffer as a result.