By on July 18, 2017

2017 Chevrolet Sonic - Image: ChevroletAmerican car buyers are increasingly turning their backs on subcompact cars.

During the first six months of 2017, the subcompact car losing the greatest number of sales is the Nissan Versa, which is suffering as Nissan realigns its dealer strategy to emphasize certified pre-owned cars.

But the subcompact car losing the second-highest number of sales is the Chevrolet Sonic, which has declined 37 percent this year (for a 10,334-unit decrease). In a continued attempt to dramatically reduce Sonic inventory — GM had a 159-day supply at the beginning of June; a 43-day supply at the beginning of July — GM is extending the scheduled plant shutdown at the Chevrolet Sonic’s Orion Township assembly plant north of Detroit, Michigan.

There are side effects from such a shutdown, an aftertaste following the swallowing of a bitter pill, spin-offs from a show nobody was watching to begin with.

2017 Chevrolet Bolt - Image: ChevroletOne such by-product of the extended summer shutdown is a temporary stoppage of Chevrolet Bolt production. In fact, it’s the Bolt’s production lapse that ignited headlines at Reuters and elsewhere. As a result of a days supply figure of 111 days heading into July, according to Automotive News, there’s a suspicion that the Chevrolet Bolt simply isn’t taking off the way a high-range electric car ought to. Only 7,592 Bolts were sold in the U.S. in the first-half of 2017.

And while Bolt sales aren’t and won’t soon be particularly high, those sales — steadily rising sales, mind you — were produced in limited markets. Moreover, while the Bolt’s 111 days of supply is excessive in an industry where 60 would be preferable and for an automaker that wants to get its overall supply down to 70 days by year’s end, days supply is based on past sales. General Motors expects improved sales now that inventory is ramping up in a broader section of America and wants to have the necessary inventory to meet demand in more markets.

Granted, the Chevrolet Bolt has not taken the world by storm, and if GM uses a plant shutdown to allow for an adjustment in Bolt inventory, it speaks to the car’s dearth of early demand. But judging the Bolt based on limited market availability over a span of a few months is unnecessary when GM, quite believably, says the Orion Township assembly plant shutdown is, “due solely to softening sales of the Sonic.”

There are no waiting lists for the Chevrolet Bolt, there’s no captivating exterior styling to speak of, there’s no EV magnate hyping embarrassing early builds. But if you want to point to a section of the market where GM truly needs to adjust its strategy, the Chevrolet Sonic’s subcompact sector is it. If ever there was a time at which General Motors could succeed in the United States with a fun-to-drive subcompact car, 2017 isn’t it.

Orion Township was previously the assembly site for the Buick Verano, a now discontinued compact car. Verano production ended late last year. With Sonic demand shrinking even faster than the plunging subcompact sector as a whole, one wonders how long before GM’s Orion Township assembly plant is a site purely operational for EVs.

Subcompact Car June 2017 June 2016 % Change 2017 YTD 2016 YTD % Change
Nissan Versa 8,155 14,683 -44.5% 56,558 72,461 -21.9%
Hyundai Accent 5,028 3,139 60.2% 32,515 39,330 -17.3%
Honda Fit 4,444 5,034 -11.7% 26,322 27,385 -3.9%
Toyota Yaris 3,708 4,239 -12.5% 25,604 23,011 11.3%
Ford Fiesta 4,026 4,064 -0.9% 24,580 25,539 -3.8%
Chevrolet Sonic 6,550 7,583 -13.6% 17,958 28,292 -36.5%
Toyota Prius C 867 1,355 -36.0% 7,049 11,573 -39.1%
Kia Rio 963 5,238 -81.6% 6,685 15,368 -56.5%
Total 33,741 45,335 -25.6% 197,271 242,959 -18.8%

U.S. sales of subcompact cars are down 19 percent this year, a loss of nearly 46,000 sales in the first half of the year. Only the Toyota Yaris, which generates three-quarters of its sales from a sedan that’s actually a Mazda 2, is enjoying improvements compared with the first-half of 2016.

In part, the Hyundai Accent and Kia Rio losses are due to a replacement phase as the two Korean cars wait for MY2018 replacements. Hyundai is shrinking its subcompact car portfolio by eliminating the Accent hatchback as the company prepares to launch the new Kona subcompact crossover. Ford appears to have no North American plans to replace the current Fiesta with the seventh-gen Fiesta that’s already on sale in other markets, apparently intending to rely on the EcoSport instead. The Honda Fit, America’s third-ranked subcompact car, is refreshed for 2018, but while Fit sales have been mostly steady over the last five years, 2017 volume is on track to be nearly a third lower than they were in 2008.2017 Chevrolet Trax - Image: ChevroletAs recently as 2014, America’s core group of subcompact cars formed 3.2 percent of the market, generating more than half a million sales. The subcompact segment’s share of America’s new vehicle market has dropped by nearly a point since then, falling to 2.3 percent in the first half of 2017.

Americans are on track to purchase and lease 375,000 subcompact cars this year.

Making up much of the shortfall, of course, are subcompact crossovers based on these very subcompact cars. At General Motors, for instance, the loss of 10,000 Sonic sales in the first-half of 2017 is more than made up by 7,800 Trax sales and 5,900 Buick Encore sales.

[Image: General Motors]

Timothy Cain is a contributing analyst at The Truth About Cars and Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars.

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66 Comments on “Americans Are Turning Away From Subcompacts In Droves; Chevrolet Sonic Plant Shutdown Lengthened...”


  • avatar
    Hummer

    Barra needs to step down, how anyone could destroy a companies world-wide sales shares so quickly, and not be pushed out, is a mystery. Has VW even taken a hit as hard as GM? So far GM has dropped Opel, destroyed its Holden brand, and watered down its American offerings.

    • 0 avatar
      DeadWeight

      Blasphemy!

      You’re picking on her because she’s a woman, you misogynist!

      Chevy Sonic, Spark, Cruze, Malibu, Impala, Camaro

      Buick Verano, LaCrosse, Regal, ChinaEnvjsjon, Enclave, $99/month Encore

      Cadillac ATS, CTS, XTS

      All doing well!

      Mary should double that 12 billion, no-strings attached check she wrote to Johan, while she’s at it, because that imaginary Escala (the one that is not made and therefore not for sale) used in Cadillac commercials to convey Cadillac’s raison de etre is awesome!

      • 0 avatar
        JohnTaurus

        GM is doing well as a whole. They are profitable. And none of this has anything to do with subcompact cars.

        When will you get it: GM is a truck/SUV company that just happens to make some cars.

      • 0 avatar
        JDG1980

        Most of the vehicles on DeadWeight’s list are in declining segments. This article, after all, is about why subcompact cars are losing sales, and the site has been doing a “Midsize Sedan Death Watch” for years. This is not a problem unique to GM. Basically, fewer people want to buy bland family cars, and still fewer want to buy them from companies that aren’t Honda or Toyota. If it weren’t for CAFE, I suspect some of these models, including the Sonic and Spark, would be discontinued (or at least not sold in the U.S. market).

        The Encore doesn’t really belong on the list at all. It’s a successful and profitable vehicle; the fact that many buff books and Internet commenters don’t like it is completely irrelevant from a business perspective.

        Buick’s sedans are designed primarily for the Chinese market, and are sold in the U.S. mostly for “authenticity”. They make money, just not here.

        Cadillac is the one area of GM that genuinely underperforms. Johan de Nysschen is selling knockoff BMW sports sedans when the market wants crossovers, and he’s trying to please the buff books instead of the people who actually buy high-end vehicles. The Escalade is profitable; most of the rest of the Cadillac lineup should go, and the division needs new leadership.

        • 0 avatar
          ajla

          “If it weren’t for CAFE, I suspect some of these models, including the Sonic and Spark, would be discontinued (or at least not sold in the U.S. market).”

          I’m not an expert on the law, but how do the current footprint-based CAFE rules necessitate the existence of something like the Spark?

    • 0 avatar
      bikegoesbaa

      I think they largely hired her to restore them to profitability, rather than absolute market share.

      If that’s the case, dropping unprofitable markets and brands makes perfect sense.

      • 0 avatar
        JohnTaurus

        ^^^^THIS, so much this^^^^^

        Making a profit is more important than bragging rights about how many cars you sell.

        Dropping money-losing Opel and dumping Holden’s unpopular cars is a good thing. Clinging to them (and Saab, and Hummer, and the other brands they dropped) to try to attain some idiotic goal of being the biggest is what got GM in bankruptcy proceedings before.

    • 0 avatar
      Prove Your Humanity 2+9=?

      She’s doing GM what Marissa Mayer did to Yahoo.

      Now if Saturn were still around, then relabeled Sonics could be sold alongside the relabeled Opels and (by now) relabeled Daewoos.

      • 0 avatar
        bd2

        Not at all.

        Mayer spent billions on ill-advised purchases of companies/tech that were never going to turn the tide at Yahoo.

        Barra has been cutting the “dead-weight” (some would say a bit too much, but there has been intense shareholder pressure to ratchet up the stock price and dividend, as well as pressure to do a stock buy-back) – which has resulted in increased profits, including the largest profit-margin in GM’s 108 year history.

    • 0 avatar
      ajla

      I think GM is going to have a problem soon.

      The F-Series is broadening the sales gap against the Silverado/Sierra (and at a higher transaction price) while a new Expedition, Navigator, Bronco, and Ranger are coming soon. Plus a new Ram is due for MY2019.

      Now it’s possible all of this will just make the pie bigger, but if GM starts losing significant BOF sales volume from new competitions that’s going to hurt.

    • 0 avatar
      Guitar man

      Nice try TTAC, but the principal reason for the apparent sales decline of the Sonic was that GM halted sales and production for of the Sonic for a few months because of a faulty airbag.

      But they have dropped the _popular_ Holden models, viz, the Commodore and Captiva.

      GMH says people no longer understand what they represent. Hardly surprising when two of their most important models, the Astra and new Commodore won’t even be made by GM and the Colorado and the Captiva had engines supplied by FCA.

  • avatar
    VW4motion

    Of course Americans are not buying hatchbacks. The Honda Odyssey is the only vehicle.

  • avatar
    newenthusiast

    While I recognize that this is really a shift from one sub-compact category to another, unless a manufacturer doesn’t have a sub-compact crossover, is this concern? Have Americans EVER bought sub-compacts in numbers beyond a small niche of the market?

    • 0 avatar
      2manycars

      Have they EVER? Have you not heard of the Volkwagen?

      https://upload.wikimedia.org/wikipedia/commons/thumb/2/24/Quatro_vistas_do_fusca.jpg/702px-Quatro_vistas_do_fusca.jpg

      • 0 avatar
        FreedMike

        LOL

      • 0 avatar
        newenthusiast

        That’s one very popular model. But Volkswagen, as a whole, has always been a small time seller in the US. Their best year as a brand was when they sold 574,823 vehicles which was 5.6% of the total market, and almost ALL of their sales were Beetles (563,522). 1968? 1969?

        Anyway, my question isn’t about a specific model or brand, but the sub-compact category as a whole. Has it ever been a popular category in the US? My guess is full size cars and mid-size cars (in wagon, coupe, and sedan variants) have sold more than sub-compacts in the US in more years than not. Of course, pick-up trucks have been at the top of the leader board for most of my life, so I am not even going to bring them into any comparison.

  • avatar
    deanst

    Sonic LT turbo automatic is $19k, Camry starts at $23k. Sonic mpg is 27/36, Camry is 29/41. Hard to see any value here, without a lot of cash on the hood.

    • 0 avatar
      gaudette

      It would take a long time to make back that $4k in gas.

      • 0 avatar
        Mandalorian

        At my local Nissan store, I can get a mid-level Altima for $19k out the door.

        • 0 avatar
          iNeon

          Oh, y’all.

          Why do we do this? Take any full-tilt car a class smaller and illustrate how bad a value it is by comparing it to a loss-leader a step above?

          • 0 avatar
            SPPPP

            iNeon, we have to do this, as smart shoppers. Both objects are transportation machines, their feature set has 95%+ overlap, therefore they are comparable.

            Your comment is like telling people that when they go a restaurant, they aren’t allowed to compare prices between pizza and pasta. Both kinds of food do the same job, therefore they should be compared.

          • 0 avatar
            FreedMike

            A Sonic turbo is probably quite a bit more fun to drive than a rental-fleet-spec Camry.

            Different buyers have different priorities.

    • 0 avatar
      tonycd

      deanst nailed it. The price of a Sonic is simply too high for the combination of size, power and quality you get.

      I had the job recently of recommending a new subcompact for a friend who’s not a car person. His top criteria were reliability and price. I looked seriously at the Sonic and found neither. In the end, several Hyundai/Kia products and two Yarises left it in the dust. If they can’t fix the abysmal Daewoo long-term reliability, which they evidently can’t, they have to compensate with a much, much lower price, and they simply haven’t.

      Which leads me to the comments above about the Mary Barra regime. She’s not autonomous – no CEO is in the current era of Wall Street tyranny – she’s imprisoned to deliver a short-term goose to the share price. But no company has ever cut its way to long-term prosperity. If GM a decade from now sells one car worldwide at a 20% profit, that is not success. Neither is the course they’re on now, which will get them there soon enough.

      • 0 avatar
        Guitar man

        The Sonic is made in Mexico at the former Suzuki factory and is based on the Chevrolet Beat concept which was derived from the Geo-Cruze/Suzuki Ignis models. The NA and turbo engines are Family 1 engines developed in 2005 – 5 years _after_ the sale of Daewoo.

        Nothing whatsoever to do with Daewoo.

    • 0 avatar
      Maymar

      Credit for not just focusing on the highway MPG number like so many do when criticising subcompacts (re. city cars), but is it fair to compare the Sonic to a car that’s not in showrooms yet? If we use the current (outgoing) Camry, the Sonic’s better (it only about to $150 a year in gas savings, but it’s something).

  • avatar
    dividebytube

    I never understood who buys subcompacts – unless you are into Minis or Fiats or whatever – when buying a low mileage used car is such a better option.

    I know some people just have to buy new – but still, for the price of a stripper Sonic, you can get a pretty nice used car, one that may even have a warranty.

    • 0 avatar
      dividebytube

      added: or you just like small cars or live in a crowded city and need basic transportation.

      • 0 avatar
        DevilsRotary86

        “or you just like small cars”

        That’s my wife right there. When it came time to replace her 2007 Honda Fit last year we looked at several options, from midsize sedans to larger hatchbacks to the Prius V. When it came time to actually pay money and sign papers what did she pic?

        A 2016 Honda Fit. She really wasn’t happy with anything larger.

    • 0 avatar
      bikegoesbaa

      If a subcompact is a good fit for your life and does everything you want why pay more for extra space and material you will rarely use?

      Even if you’re going used, a used subcompact will be cheaper still.

    • 0 avatar
      hamish42

      Why buy new? My daughter is a single mom. By buying a new Hyundai she obtained a 5 year/100,000 km warranty which will cover many of the unexpected surprises she might get with a used car. The warranty is worth quite a bit of money to her. So, her car is a bit small. If anything goes wrong Hyundai Canada pays the bills. Warranties have value.

    • 0 avatar
      scott25

      The warranty, and the fact that financing is ridiculous compared to leasing. Used cars mostly make sense if you pay in cash.

  • avatar
    SearMizok

    I think the problem with sub-compacts is they don’t cost that much less, they don’t get that much better mpg, you might as well get a little more room in a compact and get about the same mileage. Purchase price isn’t really that different either(IMHO).

    Also, when it comes to safety, size does matter. You’re more likely to get injured in an accident in a sub-compact than a compact or mid-sized.

    • 0 avatar
      JDG1980

      Part of this is down to regulation. You can no longer legally sell a cheap sh*tbox like the original Beetle; all cars must have full emission controls, and extensive safety equipment. This increases the base price of subcompacts substantially, so they’re no longer much cheaper than compacts.

      • 0 avatar
        gtemnykh

        This right here. Elsewhere in the world (although they are catching up in terms of standards), buying a small car really is substantially cheaper, whether it was a Nissan Tsuru (’91-94 Sentra) in Mexico, an ancient Fiat-based rwd Lada in Russia, etc. Call me a heartless jerk, but I really wish I could still buy a bare bones cheap car like that, without all the safety equipment, new in the US.

  • avatar
    JohnTaurus

    Wait until gas hits $8.99/gallon, either next week or the week after, everybody will buy subcompact cars and production of trucks and SUVs will stop overnight (you know, like how it did last time!!). Glory be the day! Peak oil!

    • 0 avatar
      Adam Tonge

      Correction, everyone will buy subcompact CUVs. We didn’t have those last time. Subcompact sedans and hatches are dead in this country. There is almost no point in selling them here. People that live in cities are moving away from car ownership and everyone else doesn’t what a subcompact car. Also, many brand’s compact cars go for just about the same price and get the same fuel economy.

      You have to really want a subcompact in order to buy one.

      • 0 avatar
        SearMizok

        I do like the looks of the Mazda CX-3 and the new Hyundai coming out. :-)

      • 0 avatar
        JohnTaurus

        Of course they will, Adam. Dropping the sarcasm I used in that post, of course they will.

        People didn’t trade in their Explorers on Accents or Aveos or Yaris’, they traded them in for Escapes. The F-Series and the GM f/s twins remained top sellers. The more things change, the more they stay the same.

  • avatar
    kobo1d

    Do the 2016 Yaris figures include the then-Scion iA? Wondering if Yaris+iA is actually up YTD or just Toyota counting them separately before and together now.

  • avatar
    28-Cars-Later

    But, but, but Encore.

  • avatar
    TW5

    I think the main problem for subcompacts is that they aren’t expensive enough. The industry needs to do a clean sheet redesign of every subcompact, and then raise the base MSRP to $25K. That’s what American commuters really need.

  • avatar
    whitworth

    Isn’t this the entire purpose of CAFE?

    Make the auto companies manufacture cars they don’t want to make because they don’t sell well.
    And then the cars that do sell well are forced to subsidize regulatory loss leaders like this.

    So I guess the subcompact class will never go away and other car buyers will keep having to put the cash on the hood for someone else’s car even if sales continue to dwindle.

  • avatar
    indi500fan

    When the first number on the gas price is a “1”, 99.7% of Americans want something bigger than a roller skate. There are urban enclaves where size for parking and maneuvering is important, but not many.

  • avatar
    quaquaqua

    A big reason people buy subcompacts, aside from expecting good fuel economy, is because half of the country lives in big cities where parking a “normal” sized car like my Mazda6 is nearly impossible in a garage, let alone on a street. So you have to think at least some of the entrants in the relatively new subcompact CUV segment are stealing subcompact sedan/hatch sales.

    Then again, the Sonic hatch was actually a looker until Chevy’s “refresh” removed any styling personality it had. Took it right off my shopping list.

  • avatar
    geozinger

    So the “subcompact car losing the second-highest number of sales is the Chevrolet Sonic, which has declined 37 percent this year” This is the stat you chose to highlight? There are so many other things going on, but somehow this becomes another chance to slam GM.

    What’s the real story here, besides click bait?

    Why not feature the car that’s beating the odds, the Mazdota iA?

  • avatar
    Jeff Zekas

    Time for congress to institute $2/gallon gas tax: small cars will suddenly become popular again!

  • avatar
    FreedMike

    No mystery as to why this is happening: the economy got better. When that happens, people buy more expensive vehicles.

  • avatar

    As the owner of a 2015 Sonic hatch, that we purchased brand new, it’s a shame to see sales decline of the littl’ Chevy and other subcompacts.

    To those who ask why buy a new subcompact when you can get a used, larger car? Here’s my answer:
    – We wanted a new car for the warranty, peace of mind, and new car smell. After buying used for years, I wanted new
    – We live in crowded West LA: parking can be a hassle in a larger car
    -I wanted a manual transmission: none of those on recent full size cars
    -I didn’t want anything fancy; just AC and cruise. The Sonic is equipped perfectly to my liking and doesn’t have features I don’t need
    – For a young couple, the Sonic does 95% of what we need. It’s quick enough, plenty comfortable up front, and the trunk space is generous. A full size car is a waste of real estate
    -With my driving style, I can manage to get 45mpg on the highway. It’d be impossible to get that in a full size
    – The Sonic is built in the USA. Finding larger cars built here can be challenging.

    We absolutely love our Sonic and it’s been a great companion. Unlike many subcompacts, it’s very stable, quiet, and refined in the highway, and has a big car feel in how it drives. It’s the perfect compromise.

    Funny thing is when fuel shoots above $5/gallon again (and it will), suddenly subcompacts will be popular again. It’s always surprising what short term memories American consumers have

    • 0 avatar
      JDG1980

      Americans didn’t buy tons of subcompacts last time gas prices spiked, and they won’t do so if it happens again.

      And $5.00 a gallon (assuming you’re adjusting for inflation) won’t happen any time soon. Fracking basically neutered OPEC; they no longer have the kind of pricing power they once did.

      • 0 avatar

        I beg to differ. In the early 2000’s, $4/gallon was crazy talk. That became a reality in 2005 in some states

        That spike in price suddenly spawned a wave of small cars like we’ve never seen. Where it was once just the Kia Rio, Hyundai Accent, and Chevy Aveo, the subcompact field suddenly added the Honda Fit, Toyota Yaris, Nissan Versa and Smart within two short years and the Fiesta and 2 followed suit. Most of these cars were never intended for the US market, and were quickly adapted from their homeland/European markets to our shores. Most met their sale expectations and as the article states, Fit sales are a portion now of what once were. Subcompacts will never be sales leaders in the US, but their numbers and sales growth were impressive a decade ago.

        Ironically at the same time, dealers couldn’t give away the large SUV’s that were oh-so popular in the earlier part of the decade. Amazing what a rise in gas prices can do

        Gasoline is not infinite and relies on a delicate infrastructure and political influences. Never say never that prices won’t rise as history can always repeat itself

        • 0 avatar
          Hummer

          My SS certainly has a manual transmission, and OIL is basically infinite. This is why you will see companies going back to wells abandoned 60-70 years ago and find it profitable enough to start drilling again.

  • avatar
    stingray65

    Yaris Hybrid down nearly 40%, Bolt with double the desired inventory despite being targeted at the most EV loving parts of the country…Volvo’s decision to 100% electrify their fleet is looking smarter all the time.

  • avatar
    mchan1

    Come to New England as you’ll see lots of Subcompacts on the roads.

    Many of them seen driven around on the roadways are: Nissan Versa, Hyundai Accent, Honda Fit, Toyota Prius C, Kia Rio.

  • avatar
    nrd515

    I have a frugal, very frugal friend who makes terrible choices about buying things from TVs, cars, etc, he is totally price driven. We laugh at him because he will often buy an inferior item solely because it was cheaper, sometimes just barely cheaper. When his inherited from his stepdad Taurus was wrecked, he started looking for a new car. He wound up with a leftover ’16 Fit. It was too small for him, he’s 6’3″, with a lot of leg length. His wife drives it mostly, he drove their stripper 2006 Caravan that was getting up there and becoming problem plagued after a long trouble free 150K. Last month, the Caravan finally ate the transmission, and he started looking. I predicted accurately what he would wind up with, a “certified” Journey, which he did no inspection on or anything else before buying it. Silver, of course. He would have bought one in tan if he could have. That color thing on cars, it’s too flashy for him. His wife is now complaining endlessly about the Fit being too small, and having driven it, I understand and agree completely. I just hope I never have the bad luck financially to be stuck in a subcompact anything.


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