Family Sedans Emerging as Bedrock in Industry's Slow RecoveryBy Michelle Krebs May 4, 2010
It's not the sexiest segment around, and speculation has long held that various new vehicle configurations, namely crossovers, would cause serious erosion of the midsize sedan market. But as the broad economic and auto-industry recoveries proceed almost in lockstep, it looks as if cautious buyers re-entering the market are gravitating to the safe play: sales of midsize sedans are more than a little robust.
Although most companies had trouble logging April sales that surpassed those of the incentive-fueled March, midsize sedans certainly weren't the problem. April and year-to-date sales show the segment on its way to perhaps some of its best results in a long while.
The segment's growth isn't coming from only the usual suspects, either: There's a hot new player stoking fresh interest in the four-door family car. And higher incentives, two words the industry is reluctantly latching onto as its recovery comes with one step forward and two steps back, also a playing a role in the midsize-sedan renaissance.
Data from Edmunds.com indicate the midsize-car category is on the upswing and gained throughout the industry downturn, in fact. In 2005, midsize sedans accounted for 13.3 percent of the market -- but have gained every year since. In 2008, midsize sedans were up to 16.5 percent of all sales, last year the proportion grew to 17.7 percent and so far in 2010, the midsize-car market share stands at 17.8 percent.
Some of the segment's renewed growth appears to have been spurred by increased incentive activity, however. Edmunds.com's proprietary True Cost of Incentives data shows average per-vehicle TCI increased nearly $1,000 from 2006's $1,596 to $2,547 so far this year.
Through April, Honda Accord was the segment's leader with 104,101 sales -- a 24.4-percent gain over the same period last year, albeit one of the industry's weakest in decades. And although Honda's April Accord sales of 31,766 were boosted but atypical incentives, Accord still is projecting for a year that could see 300,000 total sales, according to Edmunds.com's forecast.
The segment's largest gains came from two less-established names, however. Hyundai Motor America's all-new 2011 Sonata has cracked the whip of risky styling in what normally is a segment of careful and stolid sheet metal. Sonata sales through April of 50,283 mark a 34-percent gain over the same period last year and stage the Sonata to begin challenging the segment's establishment.
Ford Motor Co.'s Fusion, a relatively new nameplate, also is ringing up the kind of numbers that suggest the midsize-sedan market is anything but stagnant. Fusion's year-to-date sales are up 50.4 percent to 70,382 units -- not far behind the stalwart Nissan Altima's 74,245 -- and Ford said April was the best month ever for Fusion, at 18,971 transactions.
Trailing Accord closely is Toyota's Camry, with 96,509 sales through April, although the number represents a meager 5.4-percent gain compared with last year. Given Toyota's early-2010 unintended-acceleration imbroglio (which included a week-long production shutdown), however, Toyota and its bread-and-butter Camry seem to be weathering acceptably.
General Motors Co.'s Chevrolet Malibu, though aging, also is proving a good recovery play: Sales are up 31.1 percent year-to-date, with total sales at 65,875. Chevy is redesigning the Malibu for next year, so its current results likely are considered more than acceptable on the accounting floors at GM's Detroit headquarters.
Even Volkswagen's Passat, one of the segment's more minor players, is turning in comparatively strong results. April Passat sales were up 26.6 percent (although unit sales remain small at 1,090) and year-to-date sales for Passat are up 34.8 percent to 4,506 units, all without including results for the Passat's wagon variant.
Or consider seemingly perpetually surging Subaru. Its Legacy lineup was redesigned (read: upsized) for 2010, and buyers are responding. Year-to-date Legacy sales are up 87 percent to an enormous-for-Subaru 12,401 units. This, too, without including sales of the Legacy-based Outback wagon body style, which is up 128 percent year-to-date.
Combining the Legacy models, the two midsizers account for almost half of Subaru's total sales so far this year. - Bill Visnic, Senior Editor
Photos by Manufacturers
1. The Honda Accord is the best-selling midsize sedan so far in 2010.
2. Chevrolet Malibu is selling briskly despite a redesign coming next year.
3. Subaru's larger 2010 Legacy is drawing a larger body of buyers.