Midsize Sedan Demand Is Falling Fast, so What Are Midsize Sedan Prices Doing? They're Rising, and Fast

Timothy Cain
by Timothy Cain

America’s appetite for intermediate sedans is disappearing, as the queasiness consumers feel when faced with the prospect of buying a family sedan seems to be settled only by the consumption of crossovers.

They go down smooth.

This isn’t news, of course. TTAC began a close, monthly watch of the U.S. midsize sedan sector in August 2016. Since then, the demise of individual midsize nameplates has continued, and the numbers associated with the segment’s sales performance – as we chronicled earlier this month – have grown more frightening.

Yet there are signs that, at least on the retail front, the midsize sedan segment’s American decline could be levelling off. And that moderation is coinciding with something you might not have anticipated: rising average transaction prices.

According to data obtained from J.D. Power, the midsize sedan segment’s share of the automotive industry’s retail sales barely decreased, on a year-over-year basis, in the final quarter of 2018. In fact, December’s flatlining was the closest thing to a retail market share improvement the segment has seen since its share of the market last increased in – get this – the early part of 2013.

Throughout much of 2014, the midsize sedan segment was losing more than 2 percentage points of market share compared with 2013. The sharpness of that market share decline dulled somewhat in 2015 but then grew harsh again, and on a more consistent basis, in 2016. Over the course of much of 2017 and 2018, the segment’s share of the monthly retail market would typically fall by more than 1 percentage point, year-over-year.

That’s a story in and of itself. Perhaps, maybe, possibly, the segment won’t lose 16 percent of its sales in 2019, as it has (fleet-included) in each of the last two years.

But there’s another story tucked within the market share tallies. Automakers are acclimating. It’s clear that predictions of demand restoration brought on by new a new Camry and a new Accord were way off the mark. While Honda and Toyota and numerous others persist, midsize efforts from domestic manufacturers are ceasing or have already ceased. The extraordinarily low volumes generated by some remaining Camry/Accord competitors leave little doubt that others will follow the Mitsubishi Galant, Chrysler 200, and Ford Fusion.

Automakers have caught on. The overwhelming majority of new vehicle buyers don’t want a midsize sedan. “But as midsize cars have been redesigned,” J.D. Power managing director Tyson Jominy says, “OEMs are planning for much lower volumes than before, but with higher margins.”

Average transaction prices in the midsize sedan segment slid less than 1 percent to $21,797 in 2017, according to J.D. Power. Fast forward to 2018, however, and while non-midsize sedan ATPs grew slightly less than 2 percent (to $33,407), the ATP on the average midsize car jumped 7 percent, far outpacing the industry’s price growth.

“The opportunity to find an OEM with a glut of midsize cars that they are desperate to move is drying up very quickly,” Jominy says. As automakers match midsize sedan inventory to demand, incentives decrease and prices rise.

According to Cars.com inventory levels, Honda has less than two months’ supply of Accords; Toyota likely has little more than one month of Camry supply. Those two vehicles account for better than 4 out of every 10 midsize sedan sales in America.

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

Timothy Cain
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  • Namesakeone Namesakeone on Feb 26, 2019

    Could it be because we have a new Nissan Altima and Volkswagen Passat, and an almost new Honda Accord and Toyota Camry? New models tend to bring up prices.

  • Johnny_5.0 Johnny_5.0 on Feb 26, 2019

    Thank you sedan apocalypse (and dieselgate). Black Passat GT. Punchy VR6, great DSG, 40 inches of rear legroom, two-tone pleather, (too big) 19" wheels, moonroof, heated seats, heated mirrors, BLIS, rear cross traffic alert, autonomous emergency breaking, dual zone climate, Android Auto / Apple CarPlay, big gas tank, big ol' trunk. 6 year/72k bumper-to-bumper warranty. $24.6k. That's FWD 1.5L Escape SEL money for a roomier car that can do 60 in under 6 seconds and trap over 100mph (Escape is 9.2 seconds and 81mph). I get why people prefer CUVs, but I'm glad there are some comparatively excellent deals to be had in sedan land.

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    • Johnny_5.0 Johnny_5.0 on Feb 27, 2019

      @MiataReallyIsTheAnswer Most leather is pleather these days, whether they tell you that explicitly or not. The real stuff is almost always a paid upgrade if it's available at all, whether it's a value brand or "luxury" car. And if you think any of the automaker's current faux leather is as bad as the vinyl out of something like the old Datsun I had as a kid, you sir are crazy. I have kids, fancy stuff on seats like the Alcantara trim bits on my SS are just a stain magnet in waiting.

  • Dave M. The Outback alternates between decent design and goofy design every generation. 2005 was attractive, 2010 goofy. 2015 decent. 2020 good, but the ‘23 refresh hideous.Looking forward to the Outback hybrid in ‘26…..
  • Lorenzo Subaru had the ideal wagon - in 1995. The Legacy Outback was a straight two-box design with rear quarter and back windows you could see out of, and was available in brown with a 5-speed manual, as God and TTAC commenters intended. It's nice they're not raising prices, but when you've lost the plot, does it matter?
  • Bkojote Remember a month a go when Cleveland wanted to create a more walkable Cleveland and TTAC's 'BIG GOVERNMENT IS THE PROBLEM' dumbest and dullest all collectively crapped their diapers? Here's the thing- look on any American highway and it's littered with people who don't /want/ to be driving or shouldn't be. Look at every Becky on her phone during the morning commute in her Tucson, look at every Brad aggro driving his 84 month loan GMC. Hell look how many drivers nowadays can't even operate a headlight switch. You expect these people to understand a stoplight? In my neighborhood alone 4 people have been rear ended at lights from someone on their phone. Distracted driving over the past 10 years has spiked, and it's only going to get worse unless Becky has an alternative, because no judge is going to pull her license when 'she needs it to get to work!' but heaven forbid she not check fb/tiktok for 40 minutes a day.
  • Scott Shouldn't the The Italian Minister for Business be criticizing The Milano for being too ugly to be Italian?Better use of resources doing that....
  • Steve Biro Frankly, while I can do without Eyesight and automatic start-stop, there is generally less B-S with Subarus in terms of design, utility and off-road chops than with many other brands. I just hope that when they adopt Toyota’s hybrid system, they’ll also use Toyota’s eCVT.