Not so fast, the case for sedans.
Michelle Krebs, Executive Analyst for Cox Automotive, has more than 30 years' experience covering the auto industry. In addition, she now has reams and reams of data at her fingertips thanks to the all-encompassing cadre of automotive-support companies owned by the Cox group. When Michelle talks, you can pretty much take it to the bank.
So, what is Michelle talking about today? The misconception that the American sedan is on its deathbed.
First off, let's present a little perspective. In Krebs' role as analyst for Cox, she predicts that automotive sales will dip slightly in 2019 to about 16.5M units, a drop of just 3% compared to last year and still way ahead of the most recent low of 10M in annual sales.
That said, Krebs noted that SUVs and crossovers continue to gain traction in the marketplace. Current sedan market share is 31% and dropping. Krebs suggests it could see a low of 25% in just a few short years. One likely reason for the continued drop is the exit of domestic automakers from the sedan market. FCA, General Motors and Ford have all announced the discontinuation of sedan models in the past year.
More importantly though, Krebs thinks that three reasons contribute to the growth in SUV and crossover sales. She said buyers love the utility that the tall wagon bodystyle offers --the ability to quickly swap between passenger and cargo space is deemed to be a huge plus. Second, buyers like the higher seating position because it provides a better view of the road. Finally, crossover and SUV buyers find that the tall design makes it much easier to get in and out when compared to a traditional sedan.
Despite all of this, Krebs prognosticates that sedans will always be relevant and a comprise a significant chunk of new-vehicle sales. The number one reason -- affordability. Sedans are less costly to purchase, insure and repair. That means that entry-level or first-time buyers will continue to gravitate toward sedans, subcompact, compact and midsize, as they look to purchase a vehicle. And, although manufacturer profit margins are higher on crossovers and SUVs, automakers will continue to offer affordably priced sedans as a gateway to growing market share and new customers.
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