By on February 26, 2019

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.

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71 Comments on “Midsize Sedan Demand Is Falling Fast, so What Are Midsize Sedan Prices Doing? They’re Rising, and Fast...”


  • avatar
    jatz

    Jab ’em while you got ’em?

  • avatar
    cimarron typeR

    I think the avg transaction prices correlate with higher number of standard safety features and ICE(the dashboard kind).It’s a good time to be a drug rep though. No more Ace of Base rides.

    • 0 avatar
      MiataReallyIsTheAnswer

      On that subject, why do all drug reps look like catalog models?

      • 0 avatar
        indi500fan

        “why do all drug reps look like catalog models”

        If you’re a doctor (male or female) do you want to interact frequently with ugly salespersons?

        • 0 avatar
          MiataReallyIsTheAnswer

          Of course I prefer to be around hot people, given the choice LOL, but truly the appearance of my salesperson has never affected my buying decision be it a house, car, sofa, TV, yadda yadda…..maybe – MAYBE – a smokin hot waitress has convinced me to get another drink or dessert, maybe…..

      • 0 avatar
        ToddAtlasF1

        I knew two pharma reps who matched that description. One of them threw a party every year where all the girls wore lingerie and there was a bouncy castle in her yard. Strangely, I saw no evidence the other guests were clients. The other rep was doing her best to be the next patient zero. Both of them traveled for their work but bought houses in one of the most expensive markets in the country. Moral flexibility has its rewards.

  • avatar
    R Henry

    For the life of me, I just don’t get it.

    My 2015 Mazda6 with manual trans is roomy, 0-60 in around 8 secs, is comfortable, practical, has a large trunk, good rear legroom, returns 33 mpg on average, feels well planted on the road, is easy on the eyes in and out, and cost only $25k new. No CUV does all those things at that price point. Why on Earth do contemporary buyers opt to compromise so many things just to sit a few inches higher? Beyond me!

    • 0 avatar
      jatz

      Old & snow.

      There isn’t an urban intersection within 300 miles of me right now where you could see over the snow piles to know if you’re about to get t-boned when you pull out.

      • 0 avatar
        R Henry

        Yet the same sales pattern exists in my lovely coastal SoCal environs…..

        • 0 avatar
          jatz

          Old is evidently enough.

        • 0 avatar
          Hummer

          It doesn’t help that modern cars are lowered within an inch of their life, I was in a full-size 70s Polara at a junkyard a couple days ago and it’s ride height was well within the range of some of the smaller modern crossovers.

          Also had a 58 imperial in that junkyard, cars like that I long for, easy to get into and get out of, lots of glass to see all around, high enough off the ground, and an actual V8 engine.

          The grounded to the ground Camry, Civic, Malibu what have you, have lost sight of the car market chasing stupid things like fuel economy and weight reduction.

          I love my SS sedan but it was an exception in the car market which is unfortunate.

          • 0 avatar
            Steve203

            “The grounded to the ground Camry, Civic, Malibu what have you, have lost sight of the car market chasing stupid things like fuel economy and weight reduction.”

            Thank the “reformed” CAFE standard, that, by design, leans more heavily on passenger cars than it does on SUVs and trucks. Ask yourself why a passenger car has to have such a slick profile that the trunk lid is barely larger than a mail slot, but SUVs with the aerodynamics of a brick are fine.

          • 0 avatar
            Gregg Mulry

            Actually, fullsize sedans from the 70s may have been great in length, but the roofs were lower than most any of the sedans of today. Longer, lower and wider was the fashion. I am a short guy and I marvel when I get next to a sedan or hardtop from the 60s or 70s at how low they sit compared to say, today’s Impala or Corolla.

          • 0 avatar
            sportyaccordy

            “It doesn’t help that modern cars are lowered within an inch of their life, I was in a full-size 70s Polara at a junkyard a couple days ago and it’s ride height was well within the range of some of the smaller modern crossovers.”

            Just not true. My ’93 Accord was 4″ shorter than the current version. And I lowered it another 2 or so inches. You’re just getting old :)

          • 0 avatar
            Hummer

            “You’re just getting old :)”

            Shh

          • 0 avatar
            Superdessucke

            The Polara you say you sat in must have been up on jack stands, because a 2019 RAV4 has over 3 in more ground clearance – 8.6″ v. 5.7″.

            https://www.automobile-catalog.com/auta_details1.php

            https://www.boston.com/cars/car-reviews/2018/11/20/2019-toyota-rav4-review

        • 0 avatar
          sayahh

          Actually thought about buying a new 2018 (yes, 2018) Camry at a discount but then I became worried about the tires and fluids and the baked paint from the car not having been driven.

          • 0 avatar
            Hummer

            My local CJDR dealer still has new Chrysler 200s on the lot (well they did 6 months ago when I was last up there), I guarantee that a Camry setting on a lot for 6 months to a year and a half will be fine. Especially if the price and options are all right.

        • 0 avatar
          jimmyy

          I disagree. I own homes in Boston, NYC, and Newport Beach. Without a doubt, sedans still rule in SoCal. However, in Boston, SUV and CUV vehicles rule.

    • 0 avatar
      MiataReallyIsTheAnswer

      You said it right there- a few inches higher. That is “THE” main driving force. I don’t drive my giant SUV very often, but when I do, that is what I notice and appreciate most.

      • 0 avatar
        highdesertcat

        ” I don’t drive my giant SUV very often, but when I do, that is what I notice and appreciate most.”

        I chuckled when I read your comment because late yesterday I drove our 30-foot Southwind to the local Walmart Supercenter to stock up on groceries and necessities for our impending trip later this week. My wife was running around in our little ’89 Camry getting her last-minute things done.

        So I had to park that RV monstrosity at the tail end of the parking lot, furthest away from the entry doors, taking up two opposite parking spaces, the last of the two rows.

        Size and height matter! Oh joy!

    • 0 avatar
      JimZ

      “Why on Earth do contemporary buyers opt to compromise so many things just to sit a few inches higher?”

      because they’re not obligated to value the same things you do.

      • 0 avatar
        R Henry

        Of course, I agree with you, and am VERY thankful for that reality.

      • 0 avatar
        96redse5sp

        It’s all about marketing, image, conspicuous consumption, ego, herd mentality and lack of intelligence. Most people feel more comfortable buying a vehicle type that’s popular, precisely because it IS popular. These vehicles generate enormous profits,which is why they’re marketed so heavily. And so many people are envious of what their neighbors have, that they seek out a slightly better and/or more expensive version of the same thing.

        • 0 avatar
          jatz

          “ego, herd mentality and lack of intelligence”

          The third of which prevents you from realizing the first two are mutually contradictory.

        • 0 avatar
          highdesertcat

          ” Most people feel more comfortable buying a vehicle type that’s popular, precisely because it IS popular.”

          Maybe.

          But they also have to be able to afford buying the vehicle.

          Take the Suburban and Yukon XL. Not popular. Unimaginably expense to buy, operate and maintain.

          Yet is is STILL referred to as “The Texas Cadillac.”

    • 0 avatar
      Syke

      I’m four months shy of my 69th birthday, healthy and fit enough to knock out 30 mile bicycle rides, and 600 mile motorcycle rides. Just the same, I noticed last year that its a lot easier to get in and out of the family Kia Sedona than it is for me to get out of the wife’s Dart GT. And that’s one of the reasons I enjoyed the 500c Abarth so much – seat height made me forget how old I am.

    • 0 avatar
      SoCalMikester

      can you do a costco run without having to open the rear doors and put stuff in the back seat area?

      usually the toilet paper, paper towels, and 55lb bag of dog food can be tossed in the back of most any hatch and driven off. even a yaris, spark, or mirage. ive gone to lowes and brought home interior doors and 8ft lumber hanging out my hatch. wouldnt work with a trunk.

      • 0 avatar
        96redse5sp

        It’s all about marketing, image, conspicuous consumption, ego, herd mentality and lack of intelligence. Most people feel more comfortable buying a vehicle type that’s popular, precisely because it IS popular. These vehicles generate enormous profits,which is why they’re marketed so heavily. And so many people are envious of what their neighbors have, that they seek out a slightly better and/or more expensive version of the same thing.

      • 0 avatar
        96redse5sp

        I can fit five full-size NIB 32”x 80”Pella storm doors in the trunk of my sporty V6 manual transmission Ford Contour. (The back seats fold down allowing long objects to pass into the passenger compartment.

        I’ve also transported a a pair of 2” thick full-sized French doors in my trunk and can fit a half dozen 2x10s. This is a vehicle that is an absolute blast to drive, handles like it’s on rails, cost me $2000 used, gets 26 mpg and has room for four passengers.

        But my car’s absolutely at its best when it’s just me and the open road – which is about 90% of the time.

    • 0 avatar
      SoCalMikester

      hatches are infinitely better than trunks. people are starting to learn that.

    • 0 avatar
      Pete Zaitcev

      I take it, you strap your Christmas tree to the roof rack of your sedan, right?

      • 0 avatar
        R Henry

        I have done that, yes. I have also carried my share of sacks of concrete and 4 x 4 posts in my sedan too. I folded the rear seatbacks down, rolled down the front passenger side window, and was able to get a ten footer in the car…from the back of the rear taillight all the way between the front seats, and poking out the window above the rear view mirror. If there is a will, there is a way.

  • avatar
    28-Cars-Later

    Today on Sedan Apocalypse…

  • avatar
    warrant242

    The subset of buyers who think about transaction price anymore is vanishingly small.

    I think the new key to buyer psychology is just monthly payment.

  • avatar
    MoDo

    While the Dodge Charger still sells in this environment I wonder if it starts to slow down they abandon the 4dr and start making it a coupe again. A sweet looking modern interpretation of the 68-70… Call me glass half full.

  • avatar
    tonycd

    We sell in lack of volume and pass the lack of savings on to you!

  • avatar
    Steve203

    First concern is Wall St wants to see ever higher transaction prices and profit margins, so automakers find excuses to increase prices. The auto industry is not alone. Disney theme parks are frequently packed to capacity. Instead of building more parks to ease the crowding, Disney keeps raising prices, and will continue to raise prices until they see a significant drop in attendance. Drugs that have been in production for years have had sudden, large, price increases.

    As warrant242 said, when it comes to the customer, it’s all about the monthly payment. I have seen reports automakers are trying to finance people for 7 years, anything to move ever more expensive vehicles, while keeping the monthly payment at a level where they can get the buyer approved. Then the finance company can package the loans and fob them off one someone as a “securitized investment”.

    These record auto industry profits, of which inflated pricing is a major part, are being floated on a bubble of consumer debt. If the bubble bursts, like the real estate debt bubble burst 10 years ago, things could go sideways in a hurry.

    Reports this month note 7 million Americans are 90 days or more delinquent on their car loans, an all time high. Of auto loans outstanding, the 90-day delinquency rate in the fourth quarter (Q4) of 2018 was 4.47 percent — the highest since 2012, but also well below the recession peak of 5.27 percent in Q4 2010.

    I remember the night in the fall of 2008, when GMAC announced it wouldn’t finance anyone with a credit score under 700, which cut out the bulk of GM’s customers. The local Detroit media was in utter panic, and this was before hysteria and panic were the routine offering of the media.

    • 0 avatar
      Syke

      Which is why I’ve been out of the new car market for years. I’ve essentially got a top end budget of $18,000.00. Because that’s what I know I can pay off in 2-1/2 years.

      • 0 avatar
        quickson

        Same here. I’m a bit of a cheapskate, and since I love cars, I have a tendency to get bored of them quickly, so paying for a new car never makes sense for me. My wife gets the fancy new car (she also drives clients around, so it matters more), and I’ll pick up something fun and used for under $20k, drive it for 3-4 years, rinse, repeat. BRING ME YOUR DEPRECIATION QUEENS!

        I remember the temp at one of my offices, who made about $10/hr, “They said that I could get a new Camaro…” (this was early on in their most recent run, 2012 or so, and transaction prices were HIGH). I wanted to scream at her.

        Had a guy try and sell me new windows for my house once on the monthly payment (we did need new windows at the time, but… no). I guess he didn’t figure me to actually do the math. I thought he might cry when I pointed out he was asking me to spend about 10% of my home value in windows.

        EVERY DEALER FINANCE PERSON I DEAL WITH: “Why do you only want this car, you can get [INSERT EXPENSIVE NEW ONE]! Why do you only want a 3-yr note?! Your payment will be so high!”

        • 0 avatar
          SoCalMikester

          most window replacements are plug and play. take out old sashes, plug new vinyl window in, screw and glue.

          • 0 avatar
            quickson

            Yes, but these were SPECIAL windows that did magic things and reduced your energy costs and never broke walked the dogs and lowered your blood pressure.

            For a salesman, he had a hard time reading the room. At one point I told him “Oh, I believe you, dude. I just don’t care.”

      • 0 avatar
        Steve203

        “Which is why I’ve been out of the new car market for years. I’ve essentially got a top end budget of $18,000.00. Because that’s what I know I can pay off in 2-1/2 years.”

        When I worked for a retailer that had an in house financing program, we were ordered to only talk about the monthly payment. If the customer thought the monthly payment was too much, talk about a weekly payment, or a daily payment, until the amount sounded trivial. For instance “this whizbang is only $300/month, Too much? Tell you what, I’ll get it for you for only $75/week. Still too much? I’m really going to the wall here, but I’ll sell it to you for only $10/day.”

        You should see car salesmen’s faces fall when I pull out my checkbook to pay cash. No kickback from the finance company to fill the salesman’s quota.

    • 0 avatar
      ToolGuy

      The typical buyer of the typical new vehicle is not the smartest person on the planet.

      The typical shopping and purchasing process for a typical new vehicle from a typical dealer is not a model of rational decision-making.

      (The typical process for ordering and stocking vehicles from a typical manufacturer at a typical dealership is also sub-optimal.)

      Used vehicle buyers wish new vehicle buyers were more rational.

  • avatar
    jkross22

    I don’t trust JD Power with much of anything auto related. Their silly awards seem more like something Ponch talks up in a Chevy ad as opposed to anything real.

    So if they’re talking about increasing transaction prices in a segment that’s contracting, well, it’s just more that doesn’t pass the sniff test.

  • avatar
    CKNSLS Sierra SLT

    I agree with what someone said above….sedans are so low to the ground they are chore to get in and out of. That’s what makes CUV’s so attractive-and you don’t have to take that big of an mpg hit either these days to drive one.

    • 0 avatar
      Pete Zaitcev

      I can’t wait for someone to figure a SUS (Sport Utility Sedan): a car with decent proportions for humans. The BMW X6 is very close, almost there, although it is still a liftback, not a sedan.

  • avatar
    WildcatMatt

    I can see a time coming when pricing for midsizers rises to the point where near equilibrium is achieved with CUVs. Then we’ll reach a turning point.

    Does the sedan market shrink and plateau as price sensitive buyers move to taller seating and what’s left are people who really want sedans?

    Does that create enough daylight for a cheap-n-cheerful entrant underneath (a business case for Datsun in the US)?

    Or does that create a space for someone like Mitsubishi to break ranks and sell a decontented crossover?

    • 0 avatar
      SoCalMikester

      most people wont even look at something that doesnt have AC/PW/PDL and bluetooth. would that still be considered decontented?

    • 0 avatar
      sportyaccordy

      That equilibrium has already been reached with compact CUVs

      The problem is, for many, midsizers don’t have any meaningful advantages. Most people aren’t driving around 4 six footers, so if a sedan works often a compact is fine. And compact crossovers dial up the practicality significantly.

      Honda in particular has demonstrated that a compact sedan can be made with zero objective downsides (won’t speak to the looks)… I can’t think of a reason to get an Accord over a Civic Turbo.

  • avatar
    Mike Beranek

    Wheee, here I am in my CUV, sitting up so high, driving around and every corner feels like I’m gonna roll this puppy over. All the while pushing 5-10% more air out of my way every single mile I go.
    So worth it for that one day a year that I need to transport something big.
    I quote Dr. Franklin from Babylon 5-
    “A person is smart. People are stupid.”

    • 0 avatar
      CKNSLS Sierra SLT

      Mike-

      Did you read the part about sedans being too low to the ground?

      • 0 avatar
        Daniel J

        Too low to the ground? Really? I keep reading all this nonsense about sedans are lower now than ever. I just don’t buy it. My 2019 Mazda 6 sits up a full inch and half higher than the 93 cutlass I had, an inch higher than the 2004 grand prix I had, and a half an inch higher than my 2010 mazda 6.

        The new Camry and Accord sit lower than previous gen models, but no lower than my cutlass or grand prix I had previously.

  • avatar
    tankinbeans

    I thought I wanted additional ride height several years ago to see around the sea of other similarly sized conveyances. Bought an Escape. Turns out I still couldn’t see shiite around the stupid talk trucks and full sized SUVs. I quickly went back to a smaller, more maneuverable sedan.

    Tried the “if you can’t beat them, join them” route, but I’m not interested in anything bigger. If I ever need a truck, I rent.

  • avatar
    PrincipalDan

    Yeah but what about the transaction prices of the models where the is a glut?

    Malibu for example (not hard to find a 2018 Malibu here in the 2019 MY) I doubt you would have trouble finding a brand new 2018 Fusion.

    What about transaction prices for full size sedans?

    Taurus, Impala, Lacrosse, XTS, Avalon, Cadenza… (I’vc wondered what people are actually paying new for say an Impala or a XTS when the CPO prices are so low compared to MSRP.)

  • avatar
    slap

    My wife has a CR-V. I have a Miata. While the CR-V gives a higher view, because so many other vehicles are as high or higher the usable visibility isn’t that much better than the Miata.

    • 0 avatar
      MiataReallyIsTheAnswer

      True, plus with the Miata you have the wonderful ability to just maneuver around a lot of nutty stuff that pops up. I just refuse to take mine out of the garage if there’s ANY chance salt or salt dust hasn’t been fully washed away.

  • avatar
    CanadaCraig

    ‘America’s appetite for intermediate sedans is disappearing’. THAT is very misleading. Sales are down – but in 2018 843,656 Camry’s, Accords and Altima’s were sold. Hardly ‘disappearing’. It would be like saying a 1,200 lbs man is wasting away because he lost 200 lbs.

  • avatar
    joc6812

    When you get to a certain age, priorities change dramatically. I’m in my late 60’s. What’s important to me (and lots of other geezers) is ease of entry/exit, visibility, some safety tech, the quality of the dealer and reliability/dependability. Nothing else matters that much. Today’s sedans mostly flunk.

  • avatar
    deanst

    I think we’re missing the obvious- the mix of the cars are changing. Fewer Malibu’s, optimal, sonatas and fusions are being sold, and I would guess they have a lower average transaction price than an accord or Camry.

    In Canada, the Malibu now starts at $6,000 lower than an accord, before any negotiated discounts.

  • avatar
    namesakeone

    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.

  • avatar
    johnny_5.0

    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.

    • 0 avatar
      MiataReallyIsTheAnswer

      Yabbut pleather – ghetto. It’s just VINYL by another name, but vinyl same as your Aunt Gertie had in her ’72 Valiant.

      • 0 avatar
        PrincipalDan

        pffffffff Give me pleather.

        I’d love if I could get MBTex upholstery as an option in every car (says the guy with two kids in car seats.)

        Us family men need pleather and Weather Tech mats to handle the day to day of life with kids.

        • 0 avatar
          tankinbeans

          Not a family dude, but the faux leather in my Mazda6 is pretty comfortable and looks nice. Real leather smells better when new, but it’s perfectly useful and decent.

          Then again, I have average guy interests.

      • 0 avatar
        johnny_5.0

        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.


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