Midsize Sedan Deathwatch #2: July Sales Tank, Makes August a Great Time to Buy a Midsize Car
Not Chris Isaak – 1995.
Minivans crumbled as the three-row utility vehicle took over, leaving a handful of nameplates to each produce healthy volume. TTAC’s claim earlier this week? Midsize sedans are now following the same track, crumbling as the smaller two-row crossover takes over.
Already, America’s fleet of midsize sedans is decreasing in size. We expect to see a greater reduction in the number of midsize offerings soon.
Midsize sedans desperately want you. But you, oh collective American consumer, are consistently desirous of fewer midsize sedans. The current crop of midsize nameplates does not uniformly possess the mettle to survive the current downturn, a downturn which quickly grew more severe last month.
U.S. sales of midsize cars plunged by 31,000 units in July 2016.
July marked the fifth consecutive month of decline for the American midsize car category . The segment tumbled twice as quickly in July as in the first-half of 2016. The nine top sellers all attracted fewer buyers in July 2016 than in July 2015. Those nine cars — Camry, Accord, Altima, Fusion, Sonata, Malibu, Optima, Passat, 200 — account for better than 90 percent of the segment’s volume.
The July decline wasn’t the harshest during this five-month stretch. May sales slid 16 percent, a 39,000-unit year-over-year decline.
But July offered greater confirmation of the trend. May was a topsy-turvy month that brought the industry’s volume down. In July, as the market managed modest 1-percent growth on the backs of the SUV/crossover sector’s 8-percent improvement and the midsize truck category’s 29-percent improvement, the midsize car category’s 15-percent decline was far worse than the overall car sector’s 9-percent drop.
Compact cars were down less than 7 percent — the two compact category leaders both reported improved July sales. Subcompact cars jumped 15 percent compared with July 2015 (though they were admittedly down 14 percent compared with July 2014.) Meanwhile, outside of the midsize mainstream, sales of the Chevrolet Volt rose to a 23-month high, the BMW 2 Series reported yet another big increase, sales of the Ford Mustang and Dodge Challenger improved, and newly launched or refreshed vehicles such as the Chevrolet Spark, Audi A4, and Jaguar XF, produced meaningful gains, as well.
In the general sense, therefore, cars aren’t dead. Indeed, the overall sector can blame more than half of its July decline on the very midsize cars that now produce just 30 percent of America’s passenger car volume.
July’s worst offenders? The soon-to-be-discontinued Chrysler 200’s 43-percent drop is certainly noteworthy but no longer surprising. The class-leading Toyota Camry, America’s best-selling car in 14 consecutive years, suffered an 11-percent July drop worth more actual lost volume than the 200’s 43-percent decrease. Nissan’s 26-percent Altima decrease was most severe, causing Altima volume to decline by 8,893 units and the Altima’s share of its category to fall by two points from 16 percent in July 2015 (and 17 percent in June 2016) to 14 percent in July 2016.
Subaru managed to grow its July Legacy sales total by 16 percent, but for such a low-volume player, this equalled only 712 additional sales. Fewer than 3 percent of the midsize sedans sold in the United States in July were Legacys. The Buick Regal, an upper-crust competitor between categories, likewise posted a large percentage increase. But the Regal’s 50-percent volume uptick only drove its share of the category to 1.3 percent.
While midsize cars were roundly outsold by full-size trucks, compact cars, and small SUVs/crossovers in July, they remain plentiful on dealer lots, where sales managers know full well that demand is drying up in a hurry.
Thus, consumers who remain open to the idea of a midsize sedan are entitled to reap the benefits. Not only can you expect big discounts on an end-of-line model such as the Chrysler 200, Chevrolet instantly knocks $1,000 off the price of the new Malibu before negotiations begin; before more specific incentives are located. Ford’s recently refreshed 2017 Fusion is already being marketed with 0-percent financing for five years and a $1,240 discount.
Midsize cars are better than ever. They’re progressively becoming less expensive. And the likelihood of seeing yourself coming the other way is growing ever more slim.
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