When GM and Ford first announced they were abandoning sedans to double down on pickup trucks and SUVs, you knew it was a bad idea. All you needed to know was that the Japanese, Korean, and European car companies did not follow suit. That was two years ago. Now that it has happened only Chrysler and Dodge of the Detroit 3 have sedans, and they’re old as dirt. No other car manufacturers have seen it in their best interests to follow GM and Ford’s lead. Now we have some figures for sedan sales and we know Toyota is laughing at Ford and GM.
Were GM and Ford making profits from their sedans?
Sure, SUVs and pickups are really popular, but so are Prius sedans. You didn’t see Toyota killing off its other lines to concentrate on variations of the Prius, did you? No, because the Prius is just another category Toyota can make money off of. Margins might be different but profit is profit.
Were GM and Ford making profits from their sedans? They better have because there was a time that’s all there was to sell. That, and seeing other manufacturers making lots of cha-cha from their sedans should have made for some soul searching. Instead, the two corporations are going for the higher-margin segments of SUVs and pickups.
Toyota says it expects the sedan market to hit four million in 2020 in spite of the coronavirus. As Vice President of Marketing Cyntia Tenhouse says, “We’re happy to take as much of that market as we can. For us, it represents roughly 750,000 in the US. That’s more than some other OEMs sell all together. It’s amazing how much of a demand there still is for sedans.”
Toyota has a lot to be happy about relative to sedan sales
Toyota has a lot to be happy about relative to sedan sales. Before the COVID-19 pandemic hit Camry sales were up 12.5%. The hybrid version was even higher at 16.2%. Want more? Prius sales are up by almost 30% and 35% of Avalons sold have been hybrids.
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“A Camry buyer has 17 different choices, from V6, 4-cylinder, hybrid, all-wheel drive, TRD, XLE, XSE, and others,” Tenhouse says. “We’re giving people more choices within each series.” Is that one of the secrets to selling a sedan? Even the Corolla is seeing strong sales. Sedans like the Chevy Impala have only one engine choice. But most are like the Buick Regal with a couple of different engines and no hybrids.
For over a decade Nissan Altima has sold between 200,000 to over 300,000 units
Even the Nissan Altima is selling well, and it hasn’t changed in, oh, like 67 years. For over a decade it has sold between 200,000 to over 300,000 units. It also has only two engine choices, but they’re spread out over five trim levels. As Nissan has pulled in over the years it is expected that it would have fewer choices. In spite of that sales are solid.
So armed with all of this why was the choice to kill sedans a good one for Ford and GM? It is as long as the market doesn’t change, as it is prone to do. As long as consumers are in the mood for pickups and SUVs they’re golden. But if there is a shift and sales bounce back to sedans then there is trouble for the two companies.