Midsize Sedan Death Watch #3: August 2016 Midsize Sales Plunge 26%
There will always be a place in the American market for the conventional midsize sedan.
Despite harsh declines in recent months, consumers are still on track to register more than 2 million midsize cars in calendar year 2016. In fact, a handful of nameplates — Accord, Legacy, Malibu — are attracting more buyers this year than they did in the first two-thirds of 2015.
But U.S. sales of midsize cars are now falling with a special kind of speed, plunging 26 percent in August, a loss of nearly 58,000 sales over the span of just one month.
This is not the kind of environment that supports a dozen candidates. TTAC’s certainty that some intermediate family sedans will die is based not on anonymous sources or fuzzy feelings, but rather on history.
What’s past is prologue.
Look around to see if any automaker which isn’t currently competing in the midsize market is about to jump into the pool.
And keep looking.
Not only are we failing to see new ground broken by midsize sedan infiltrators, the changes we do see in the segment only reflect departures.
Pontiac G6, Suzuki Kizashi, Mitsubishi Galant? Long gone.
Dodge Avenger? Sales rose to a seven-year high in 2012; the last Avengers were sold last December. The Avenger departed because Fiat Chrysler Automobiles’ product plans called for one entry in the midsize category.
Yet that entry, the Chrysler 200, is dying now, as well.
Which cars are next? There are certainly some viable candidates for extinction, a fact made all the clearer by disastrous August sales results. With but one meaningful exception, the whole midsize sector cratered in August.
Year-over-year losses of more than 30 percent were reported by the Chrysler 200, Nissan Altima, Ford Fusion, Kia Optima, and Hyundai Sonata. Combined, those five nameplates attracted 67,266 buyers in August 2016, down 38 percent from 108,933 sales in August 2015. While the degree to which those cars declined in August was especially harsh, the 200, Altima, Fusion, and Optima were already selling less often this year than last.
Segment leaders were not immune from consumers’ decreased interest in midsize cars. The second-ranked Honda Accord fell 26 percent compared with August 2015; 41 percent compared with the Accord’s best-ever monthly result in August 2014.
The Toyota Camry, America’s best-selling car, didn’t suffer nearly as sharp a decline as most rivals, but the 13-percent year-over-year drop still translated to a loss of more than 4,700 sales. August was the seventh consecutive month of Camry decline. August was the first month in Toyota’s U.S. history in which the RAV4 outsold the Camry.
Amidst the turmoil afflicting the bulk of the midsize sector, Subaru reported an all-time record high in Legacy sales. Along with records from the Forester and Outback, Subaru’s two top-selling models, Subaru reported an all-time brand-wide record with more than 60,000 sales in August 2016. The Legacy nevertheless earned only 3.5 percent of the midsize market, though that’s a big leap from the 1.9 percent Subaru achieved in August 2015.
A 25-percent drop in Mazda 6 sales drove the athletic but seemingly undesirable midsize Mazda below 5,000 monthly sales for the 11th time in the last 12 months. Sales of the Mazda6 have decreased in 10 consecutive months, falling 23 percent during that stretch.
Chevrolet stands at the ready with a far more competitive Malibu in 2016, but after first-half volume jumped 25 percent thanks to six consecutive year-over-year increases, the Malibu was struck by the same illness that had already sent so many of its rivals to bed. Summer sales across July and August tumbled 15 percent.
With so many noteworthy midsize failures in August, the segment ended up as a thorn in the side for the industry as a whole. U.S. auto sales fell 3.5 percent in August, a loss of roughly 55,000 sales. Remove the midsize car category from the equation and the industry actually expanded, albeit by a modest 0.2 percent.
The yuuuuge decrease in midsize car volume was by no means matched in other key sectors of the mainstream passenger car sector. Compact cars were down by only 3 percent; subcompact car volume increased 4 percent.
[Image: Subaru; Chart: © TTAC]
Plee on Sep 07, 2016
I think you all are overlooking one possibility as to why these numbers dropped. Closer examination of the numbers show that the numbers for those who do not do many daily rental sales did not show much drop if any. I suspect that thousands of 2017 rentals were put into service over the last 30-60 days and in August not so many. The auction where I work already has loads of 2016 rental turn backs going through. I wish it were possible to break this down, maybe actual retail customers bought more mid size than last year. No need for panic. Cars are not going away.
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