The Chevrolet Cruze, Impala, and Volt are dead. Instead, General Motors’ bread-and-butter division will focus on more affordable crossovers and highly profitable trucks for the future. Meanwhile, rival Honda has a very different picture of the future, and its passenger cars are a big part of it.
Automotive News (subscription required) reported on Honda’s peachy outlook for cars on Friday, and things look good for one reason: Generation Z. There’s little consensus for when the age bracket ends, but most agree this demographic is the “post-millennial” generation born in the late 1990s and early 2000s. And these youngsters really like sedans, coupes, and hatchbacks.
Often, these young buyers are purchasing their first car and cars remain far more affordable than a crossover or truck. Honda’s own data showed nearly half of first-time buyers looking at new vehicles chose a car. Honda itself still holds an impressive share of new-car sales, too. While the industry is somewhere around a 30 percent passenger car, 70 percent light truck mix, Honda’s mix is more like 47.5 percent car to 52.5 percent light truck.
With rivals like GM and Ford completely exiting (or nearly exiting in the case of the Chevrolet Malibu) the passenger car market, it gives Honda an even greater chance to court first-time buyers and young people. Just like the Big Three did last century, the hope is to keep them within the Honda portfolio for life. Perhaps they purchase a Civic first, then an Accord. A Passport could come next, then a Pilot as their family grows.
“Why would we turn our back on those customers, which represent the future of our brand?” Henio Arcangeli Jr., senior vice president of the automobile division of American Honda Motor Co., said.
It will surely be intriguing to see how automakers’ strategies play out. Will new buyers splurge for the market trend that is crossovers? Or will affordable vehicles bring about a resurgence of sedans? Time will tell.
Source: Automotive News (subscription required)