When 28-year-old Stephanie Rivera of South Gate, Calif. walked onto the car lot, she knew exactly what type of vehicle she wanted – fuel efficient and economic. Rivera upgraded from a Honda Accord to a Nissan Juke, also known as a crossover.
“I bought a Nissan Juke specifically because it was more compact than a sedan… but it was also elevated,” Rivera said. “It would be easier for me to find parking in tight spaces and it was pretty fuel efficient,”
For many Americans like Rivera, the benefits and incentives of buying an SUV or crossover outweigh those of buying a sedan. This year alone, passenger cars accounted for only 37.5 percent of auto sales during the first two months according to Autodata Corp. And for automakers, this is a sign of uncertainty for the future of this segment.
By contrast, the sale of trucks and SUVs rose 58.2 percent in January during the same period a year ago.
Car manufacturers like Nissan, Honda and General Motors saw increases in sales last month due to their push for SUVs and crossovers. GM’s Chevy Equinox and Traverse SUV models rose in deliveries at 4.2 percent, creating a shift that has been followed by many other manufacturers in leaving the sedan behind and focusing on consumers’ buying trends.
And with the growth in popularity for SUVs and crossovers, sedans are getting a significant run for their money.
“SUVs are pretty popular right now. A lot of the growth in SUVs is coming at the expense of cars [passenger cars],” said Erich Merkle, U.S. sales analyst at Ford Motor Co. “In fact, last year, SUVs just surpassed cars for sales leadership in 2016, not at Ford, but overall in the industry.”
The industry sales pace slowed last month to a seasonally adjusted annualized rate of about 17.6 million light vehicles from 17.7 million a year earlier, according to Autodata Corp.
Gas prices are also indicative of the SUV and crossover trend. Prices are relatively low and projected to remain low for the foreseeable future according to the U.S. Energy Information Administration.
“Sedans are really losing both on the fact that there’s not enough gas price pressure to get people into more efficient, smaller vehicles and the appeal of the greater utility of the SUV,” said Kristin Dziczek, director of industry, labor, and economics at the Center for Automotive Research.
And fuel-efficiency also makes a stark difference in which vehicle consumers choose when buying.
SUVs and crossovers are no longer the guzzlers most people think of when they hear the words ‘utility vehicle.’ Today, they are offered with V6 and V4 engines, not just V8.
According to Dziczek, SUVs expansion from mid-sized vehicles like the Jeep Cherokee, to very small and large SUVs has given consumers a range of options that are more appealing segments than sedans.
Another reason why consumers are turning to SUVs and crossovers? They get more bang for their buck.
“It really is about the functionality and utility. You can get just get a lot more from a cross utility vehicle,” said Steven Szakaly, chief economist at the National Automobile Dealer’s Association. “They still have have a really good fuel economy and so they just overall offer greater value to consumers.”
Dziczek herself recently switched over from a sedan to a small SUV.
“I got out of a sedan and into an SUV – and I’m not changing,” Dziczek said. “I’ve got an eleven-year-old and I until recently had an elderly mom who needed a wheelchair thrown in the back seat. I had cribs and wheelchairs and all kinds of stuff and it wouldn’t have fit in my sedan.”
At Ford Motor Co., dealerships are seeing one particular group embrace the SUV and crossover trend – baby boomers.
“What you’ll find is that as they [baby boomers] become empty nesters, many of them will often times move into smaller SUV products, such as the Ford Escape and all the other competitors that are out in the marketplace, like the CR-V and the RAV4,” said Merkle.
For baby boomers, ingress and egress is one of the main features that attracts them to SUVs and crossovers according to Merkle. That is, the sliding entry movements involved in entering and exiting a vehicle. They may not need the size, but they do like the visibility.
But not all is lost for the sedan. Manufacturers are hoping to save the segment by shifting their attention to another demographic.
“We are focusing our research on what millennials want,” said Dan Jones, car communications manager at Ford Motor Co. “Do they care more about the design or do they care more about plugging in their iPhone to their car and listening to their music?”
It is no sure thing new marketing tactics will bring buyers back to the sedan, but it is certainly not the time to say sedans are going anywhere according to Szakaly.
“Sedan sales are declining. Clearly people prefer cross-utility vehicles and those are going to continue to grow, but the death of the sedan completely is a long way off. There are still a lot of very dedicated sedan drivers and buyers.”