Battle Lines Drawn for 2013 Model Year
It used to be that Oct. 1 marked the official start of the new-car model year. That tradition has largely been thrown out of the window over time with vehicles being launched seemingly monthly. Nevertheless, the 2013 model year is upon us and some clear themes have emerged. The battle lines already are drawn in the midsize sedan and luxury car segments, while skirmishes are breaking out in the pickup truck market, a prelude to the full-blown contest of the next couple years.
The Year of the Midsize Sedan: Skirmishes in the all-important midsize sedan segment occurred over the last couple of years but the full-blown battle in the category commences this fall with nearly every major automaker having their newest soldiers in the fight. The midsize car market is one of the largest and most important categories in the U.S. Nearly one in five vehicles sold in America is a midsized car. The category typically gains traction when gas prices rise as midsize cars don't cost much than far smaller, fuel-sipping compacts and subcompacts while they offer increased people-carrying and cargo-hauling space than small cars. At the same time, midsize cars offer a not-giving-up-much alternative to downsizing from SUVs and larger cars.
For nearly a decade, two players — the Toyota Camry and Honda Accord — have dominated the best-sellers chart as No. 1 and No. 2, but they are being challenged on all flanks as the entire field of midsize sedans is new or freshened in the past couple model years.
Toyota has sold more than 15 million copies of the Camry worldwide since it was introduced in 1983. It has been the best-selling car in U.S. since 2002 and is on it is well on its way to being No. 1 this year, leading by a wide margin. The seventh-generation Toyota Camry was redesigned for the 2012 model year, going on sale last fall. The 2012 Toyota Camry features new sheet metal, a roomier interior, a revised suspension and more powerful but more fuel-frugal engines, including a hybrid model rated at 43 mpg in city driving.
The Camry's closest challenger is the Honda Accord. The Accord was the best-selling car in America in 1990, 1991 and 2001, and has taken second place behind Camry for most years since 2000. It likely will retain the No. 2 spot for 2012 as well. The ninth-generation 2013 Honda Accord, the sedan version of which went on sale in September with the coupe to follow in October, also is completely redesigned with new sheet metal, new powertrains and new versions, including an upcoming plug-in hybrid and regular hybrid. Honda is being aggressive in undercutting its domestic challengers, the Ford Fusion and Chevrolet Malibu, on price, and packing feature content into that price.
While Camry remains ahead of Accord in sales, a recent Edmunds' InsideLine.com comparison test of the four-cylinder models put the new Accord ahead of the almost new Camry. The comparison noted: "The new four-cylinder engine and CVT work incredibly well together, providing usable performance and a real-world improvement in fuel consumption. Honda also improved the look and feel of the cabin, while adding the tech features that have become important in this class. In the midst of checking all those boxes, company executives didn't lose sight of details like handling and steering feel — key ingredients in the character of Accords past and present. Next to the Accord, the 2012 Toyota Camry LE is down on flavor. It's every bit as useful as the Honda on the inside, but on the road, it's slower and wholly uninterested in doing anything other than taking you to work in comfort."
However, even before their recent makeovers, the Camry and Accord were confronted with a trio of newcomers. Hyundai challenged the conventional wisdom that said midsize sedans are little more than appliances, safely and reliably traveling from Point A to Point B, when the South Korean automaker introduced the Hyundai Sonata in 2011. The Sonata gained momentum not only from its swoopy styling but also from, at the same time, Toyota faltering from recalls. Ironically, the Sonata is now the granddaddy among the midsize sedans. Constantly in tight supply, the Sonata is running as the sixth best-selling midsize car in America, with 158,014 sold through August, slightly ahead of the same 2011 period. Hyundai added a third shift at its Alabama factory where it produces the Sonata in early September.
Similarly, the Kia Optima was completely revamped shortly after its cousin the Sonata was, and while not as swoopy as the Sonata, the Optima has received high praise for its fresh design. As a result, Optima sales are running at about double the pace of 2011 so far this year, and are right behind Sonata in the midsize car sales race.
Vowing its recommitment to the U.S. market, Volkswagen introduced a new Passat in 2012, which is built at the German automaker's new plant in Chattanooga, Tenn. For the first nine months of 2012, Volkswagen announced in mid-September that it had sold 77,524 Passats for the year to date, more than its best full-year of Passat sales, which was in 2001. In recent months, Volkswagen has been selling more than 10,000 Passats a month, putting it at ninth place among midsize cars sold in America.
General Motors rolled out the first version of its redesigned 2013 Chevrolet Malibu in January — the mild hybrid Chevrolet Malibu Eco — so the automaker had a good fuel-economy story to tell. The new Malibu now rides on the same underpinnings as the Buick Regal, which makes it slightly shorter in terms of overall length and wheelbase. This fall, Chevy launches the rest of the Malibu models, including the 259-horsepower turbo sedan.
In June, Nissan began selling its 2013 Nissan Altima. The Altima's reskinned body is stiffer, yet weighs 80 pounds less than before. In its fifth generation, Altima is fitted with engines and transmission revised for better acceleration and higher fuel efficiency. The Altima is extremely important to Nissan as it accounts for almost a third of the brand's total sales. In 2011, when Toyota and Honda were crippled by the Japan earthquake and tsunami, the Altima surged ahead of both the Camry and Accord in some months, closing 2011 in the No. 2 spot. So far in 2012, it is running in third place.
Last but certainly not least, Ford introduces the completely redesigned 2013 Ford Fusion. Like Hyundai before it, Ford also challenges the vanilla-is-best axiom has governed the midsize sedan market by introducing this fall a Fusion that bears a resemblance to an Aston Martin, a brand Ford sold along with all of its other European premium marques. Indeed, right from the start, the Fusion began winning critical acclaim when it was unveiled at the Detroit Auto Show last January. More versions are available than before, and the Fusion offerings continue to include a hybrid option. They can be loaded with driver aids, including the controversial MyFordTouch, highly criticized by Consumer Reports even after supposed fixes. Ford also will have the capacity to rival the Toyota Camry and Honda Accord when it adds Fusion production capability at its Flat Rock, Mich., assembly plant, formerly shared with Japanese automaker Mazda.
And speaking of Mazda, it is unveiling a new midsize Mazda 6 at the Paris Auto Show. The automaker stresses it will resemble the Mazda Takeri concept car, which was unveiled at the 2011 Tokyo Auto Show.
In virtually all cases, consumers will see a significant boost in fuel economy in all of the new improved midsized sedans hitting the market this year and next.
Can styling resuscitate large car sales? Large cars have lost out to midsize and smaller cars as well as crossovers in recent years. So far this year, sales of the top seven selling cars in the large-car category combined to under 380,000 sales — about 100,000 units more of the number of Camrys Toyota has sold in the same period.
Still, automakers are pumping significant money into restyling these stodgy lugs. Will their efforts pay off in higher sales, especially to retail instead of fleet customers? Sales of large cars are heavily dependent on corporate, government and daily-rental car fleets, with the percentages of fleet sales of the top seven bestsellers running from 14 percent to a hefty 77 percent.
Indeed, Chrysler has seen a sales surge from the sprucing up its Chrysler 300. The brand's flagship sedan had its best August since 2007 with sales for the month up 65 percent; 300 sales are up 158 percent to nearly 49,000 units for the calendar year to date. Still, 45 percent of the 300's sales are to fleets. The Dodge Charger runs at about 40 percent fleet sales.
Both General Motors and Toyota introduce new versions of their large cars. A vastly revamped Toyota Avalon goes on sale by year-end. The car's far more stylish design wowed the crowds at last spring's New York Auto Show where it made its debut. That was the point as the new Avalon marks the first car that bears the get-more-stylish and add-more-emotion mark insisted upon by Toyota CEO Akio Toyoda, grandson of the company founder. In addition to its new skin, the Avalon adds a hybrid for the first time, boasting a 40 mpg city and 39 mpg fuel-economy rating. So far this year, about 28 percent of Avalon sales have been to fleets.
The 2014 Chevrolet Impala similarly goes all fashionable when it goes on sale next year. The Impala gets a sleeker, more sculpted look and a choice of three engines, including a mild hybrid version. The Impala is the biggest seller in the large-car category with nearly 125,000 sold so far this year, but Chevy has the biggest job to do in terms of breaking its fleet-sales addiction. Nearly 77 percent of Impala sales so far this year have gone to fleets. GM freshens another of its large cars — the Buick LaCrosse — next year.
The 2013 Ford Taurus looks the same as the previous version but a new engine choice — a 2.0-liter EcoBoost four-cylinder rated at 32 mpg highway is on the market this year. Ford also has a fleet issue with the Taurus; nearly half of its sales this year so far were to fleet customers.
Prelude to Truck Wars: As was the case with the midsize sedan segment in the past few years, we are seeing the build-up to a full-blown truck war over the next two years. Chrysler launched the first volley with a mid-life refresh on its 2013 Ram 1500. This makeover is far more extensive and significant than usual for a mid-cycle one. While the Ram 1500 doesn't look vastly different from the previous version, the truck is lighter weight, thanks to wider use of aluminum and high-strength steel. A 305-horsepower 3.6-liter Pentastar V6 makes its debut in the Ram and will be used in many other Chrysler, Dodge and Jeep models later. The engine is more powerful and more fuel-efficient than the one version it replaces. An eight-speed transmission also debuts in the Ram 1500, also for improved fuel economy.
Better fuel efficiency for trucks, now required by more stringent upcoming Corporate Average Fuel Economy standards, will be the name of the game as new trucks are introduced. GM introduces its completely redesigned pickup trucks — the Chevrolet Silverado and GMC Sierra as well as the SUVs that share their underpinnings — in 2013. Ford follows in 2014 with the introduction of its completely revamped F-150. There's lots of buzz about heavy use of aluminum in the F-150, the best-selling truck and vehicle in America for at least three decades.
Hotly Contested Luxury Crown: With Toyota's Lexus knocked out of the running last year by the March 11 earthquake and tsunami that caused shortages of its vehicles, Mercedes-Benz and BMW engaged in nasty hand-to-hand combat for luxury sales supremacy in the U.S. Mercedes-Benz ultimately won out and it remains slightly ahead so far in 2012 but BMW, with nearly a full year of new 3 Series sales under its belt, is extremely close and Lexus is gaining ground. Lexus is introducing a host of new models this year, including redesigns of its high-volume RX SUV and ES sedan along with freshening of more niche models like the flagship LS sedan and sports performance GS sedans.
Meantime, Audi continues to rack up record sales in the U.S., Acura is trying to regain traction with some new models, and Infiniti is fully recovered from the earthquake. Meantime, domestic automakers Cadillac and Lincoln are trying to get back into the luxury car game. Cadillac introduced two new vehicles — bookends — this year; the entry-level ATS is Cadillac's answer to the BMW 3 Series while the flagship XTS sedan is intended to retain loyal customer buyers. Lincoln reinvents the brand with the MKZ, due out by year-end, as the harbinger of what's coming down the road for the Ford luxury marque. In addition to a new model, Lincoln is focusing heavily on customer service, including concierge treatment of customers.
Meantime, mark the calendar for December. The last month of the year is always a strong month for luxury car sales so aggressive marketing and sales shenanigans surely will abound as the players for this pretty much meaningless sales crown.