Consumers Choose Cars — Small to Midsize — as Gas Prices Rise
With gas prices rising throughout the month, consumers increasingly turned to small to midsize cars in February. Sales of midsize, compact and subcompact cars combined made up more than 40 percent of all U.S. sales last month, according to Edmunds.com's sales analysis for the month by segment.
As gas prices edged higher almost daily, it's not at all surprising that the subcompact segment rose more than a percentage point, though subcompacts remain a thin 5.3-percent slice of the total market. Always one of the largest segments, the compact car category eked a tiny gain to 17.3 percent of sales.
What may be surprising at first glance is that the midsize car segment shot up 1.6 percentage points to 18.5 percent of the total market. That made it the single largest sales segment in February. A year earlier, the compact segment held the top spot. This kind of surge is not unprecedented during periods of gas price spikes, and the segment is likely to be extremely robust this year. A midsize sedan is the consumer's safe bet. If buyers downsize from a larger car or sport utility, they give up little with a midsize car in the way of amenities but they gain in fuel economy. A move up from a subcompact or compact provides the buyer with more room without a huge jump in price or fuel economy.
The midsize car segment is likely to flourish this year as automakers launch new models. A revamped 2012 Toyota Camry hit the market last fall as did the U.S.-built Volkswagen Passat. Chevrolet is just now rolling out the new Malibu, first as the fuel-efficient Eco version with other variations to follow. A freshened Nissan Altima is due this summer. The vastly redesigned Ford Fusion and updated Honda Accord hit the market in fall. The Kia Optima just went on sale last year. The Hyundai Sonata, while introduced only a couple of years ago, is the granddad of the big-selling midsize sedans. It was the Sonata, with its head-turning styling, that demonstrated a new, compelling entry in the segment lifts all models. The midsize segment stood at only 13.3 percent of the U.S. market in 2005; after the introduction of the Sonata, the segment grew to above 17 percent.
As subcompact, compact and midsize car sales gained in February from a year ago, crossover sales, interestingly, did not. Both the midsize and small crossover segments saw dips of .6 of a percentage point. Could it be those crossovers, though vastly superior to SUVs of yesteryear, still do not achieve the fuel economy desired by consumers? The small crossover segment could get a lift later this year as the newly styled Ford Escape hits the market against the freshened Honda CR-V. Large truck sales dipped, which is not surprising in light of gas prices. Other segments — midsize SUVs, large cars and minivans — held relatively steady.
A deep dive into the segments shows most are led by the usual suspects — with a few exceptions. Replacing the Chevrolet Aveo, the Chevrolet Sonic, which General Motors advertised on the Super Bowl in early February, is off to a fast start. The automaker sold 7,900 Sonics in February, far exceeding anything else in the category and even pushing ahead of last February's leading Ford Fiesta. The recently revamped Hyundai Accent also had a good month, ranking second and surpassing the Ford Fiesta, which saw sales drop from a year ago, likely due in part to a substantial surge by its bigger sibling Ford Focus.
The Honda Civic regained its hold on first place in the compact market. Revamped last fall, the Civic has been harshly criticized for not being up to par with its new rivals, and production has been slow due to the last year's earthquake in Japan. The Focus finally gained some traction, thrusting it into second place among compacts ahead of the Toyota Corolla. The Chevrolet Cruze rounded out the top four followed by the award-winning Hyundai Elantra.
In midsize cars, the Toyota Camry took first place as usual, but the Nissan Altima continues to surge as the automaker begins its wind down to make way for the new version. The Honda Accord, also hindered by the Japan earthquake, still struggles to regain its footing.
In the box car category, now down to three entries with the drop out of the Honda Element, is dominated by the Kia Soul. Meager sales of the Nissan Cube — a scant 687 in February versus the Soul's 10,000 plus — suggest the category could fall to only two entries with the Scion xB being the Soul's sole competitor.