Industry Runs Short On Passenger Cars As Automakers Build More Utility Vehicles
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It’s the same tale we’ve heard for over a year now: trucks and SUVs are hot, and passenger cars are not. We’ve seen Ford and General Motors can nearly every passenger car on sale today in favor of utility vehicles.
Now, that focus has created a somewhat different kind of problem. Per an Automotive News (subscription required) report on Monday, the industry saw the number of unsold passenger cars drop to its lowest level since 2011. Translation: the cars that have slipped in popularity are actually in shorter supply. After all, plenty of buyers are still actually buying Malibus, Camrys, and Accords.
The raw numbers speak for themselves. In the beginning of July, there were an estimated 1,008,000 passenger cars unsold on dealer lots, or a 60-day supply. Total, that’s about 25 percent of the total inventory mix. In contrast, through the first six months of this year, passenger cars accounted for 29.4 percent of new vehicle sales. There lies the 4.4 percent gap between supply and demand.
Overall, inventories are slightly higher than 2018 figures, but still below 2017 levels. Recall, GM famously held an incredibly high inventory level two years ago. GM pledged to get the figure down, and it’s done just that in the past couple of years. The entire industry holds at 69-day supply of vehicles across all segments.
The news shouldn’t exactly shine a light on the passenger car’s sudden return. Trajectories still show the sedan will continue to decline in favor of utility vehicles for the near future. However, buyers previously considering, say, an American compact sedan will be forced to shop elsewhere.
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Fake News
Rental companies buy a large amount of vehicles in the first 4 months of the year. Rent a lot of vehicles in the middle 4 months of the year, and sell off 2 year old models in the last 4 months of the year.
If you review last years sales numbers, you will see sedan sales really tanked in September, October & November.
If you review statements from GM last year. You will see in late summer they were saying they still support sedans. By Thanksgiving they were announcing plans to kill off 6 models.
Why isn’t Chevrolet more aggressive about setting taxi operators up with the Malibu hybrid? Were they just going to sit back and let Toyota take that market all to themselves?
My guess is due to ride sharing taxi services are on the decline, much like sedans. So why go through the expense of investing in a large scale assembly on a vehicle that will not likely see a wide appeal, especially when the Prius has such deep footing with current taxi companies? In a way Toyota already has that market for better or for worse.
They are already building the Malibu hybrid. Why not push them to taxi fleets or Uber drivers?
A lot of taxi fleets require hybrids.
Ride-sharing Company’s alike need a reliable auto thats not a fuel HOG to drive up the miles!!
Why not, they let it happen with law enforcement vehicles.
The Law Enforcement Departments need auto’s that can keep up w/speeders & criminals who think they can out run them! When their local D.M.V.’S register auto’s w/their state: the 5-0 call upon the city for more powerful auto’s that the public buy & modify each & every auto that the individual builds!!
Another question: why doesn’t Chevrolet *advertise* the Malibu Hybrid?
The vehicle itself with the “mild-Voltec” system is quite fantastic, is quicker than the 1.5T Malibu due to the extra oomph from the motor, and gets outstanding city and highway fuel economy…yet GM refuses to make mention that it exists.
Chevrolet’s Malibu and Equinox demonstrate that the consumer prefer a CUV over a sedan, the Equinox is a slightly smaller vehicle and is almost $2K more expensive yet the Equinox outsells the Malibu by over twice as many vehicles (Chevy Malibu sold 10,325 in June 2019 while the Equinox sold 28,552 in the same time period).
Chevy pour money into the new Corvette, which is a niche product, and then kill off Impala, Cruise, Malibu.
Sure car sales are falling, but they are still 30% of all vehicles sold. Ford and GM are just handing over a huge chunk of sales over to the Japanese, Korean and European car makers.
I will always prefer a car over an SUV. So will a great many other people. There will soon be a bottoming out in the car sales decline. It’s common sense that this will happen. It might even reverse direction someday. When that happens, GM and Ford will be missing out and will rush to play catch-up.
Why would anyone perfer a sedan ( or car as you called it) over a CUV or SUV. The only thing I can think of is the look?? I see no advantage of a sedan over a vehicle that has 4 doors , carries the same amount of passengers but with added cargo room (with a rear door to put it in), rides higher for visibility, increases road clearance ( a major advantange in the numerous weather patterns we see today), all with a smaller foot print when comparing apples to apples. There is one type of vehicle based on a sedan frame that may return & that is the station wagon. Get it off the ground (unlike the current Buick Regal) & it stands a chance.
Because not everyone want’s a CUV or SUV. i do agree on the practicality.
Sedans have 4 doors, how often do you need cargo space? rent a uhaul when you need to, sedans ride lower so less danger of a rollover,
Thank you for your excellent commentary…
I’m old enough to prefer a comfortable, stylish powerful sedan to a utility vehicle, all day long…
I’m also old enough to remember, when I would hear older family members say, that ‘whatever GM builds,
people will buy’…that was then, but today that loyalty is no longer there, to the percentage it once was…
and people jump ship everyday, to get what they want, and if they get what they want, from a different
manufacturer, that’s where their relationship will stay. We are still old fashioned loyalists…we purchased a new 2015 Chevy Silverado LTZ Crew Cab, in December of 2015, and a beautiful new 2017 Impala LTZ Premier, in December of 2017…both are great vehicles, for the most part…but in a few short years, we will be Sedan shopping, and the only full size GM sedans, in our budget (maybe??) will be a ‘Certified’ Cadillac.
Otherwise, we will be looking at Honda or Toyota’s upper models, and no disrespect, but we prefer to buy
American, to support the American worker and economy.
Chevrolet should have refreshed Impala, but lowered the price and used it as a Camry killer.
I like Malibu but Impala is a stronger entry. Only Honda Accord and Mazda6 compare.
Totally agree, the Impala is a great car, got some of the best numbers Consumer Reports ever awarded, and I truly love my 2014, and disappointed at the lack of advertising Chevrolet gave it. Looked at the Malibu, but find it cheaply made.
Wouldn’t that basically just make the Impala into a Malibu?
Toyota, Honda, Nissan and the Korean twins are laughing all the way to the bank. Yeah most sedan sales are slowly dropping blah blah blah. That doesn’t mean you completely pull out of the entire market and give up. Taking away more and more choices is only going to piss off consumers and force them to other manufacturers. Many consumers like myself are not going to give in and pay more money for something they don’t really want or like and will simply switch to another company that still has the foresight to make sedans or sporty cars.
So buy a Malibu then.
right now I know of 4 buyers that are going to look for sedans and don’t want a suv , THANKS DEMENTED MARY AND YOUR CRONIES GET YOUR BRAINS OUT OF YOUR A– AND READ THESE COMMENTS , BETWEEN KILLINGS SEDANS AND ASSEMBLING CARS OUT OF THE U.S.A YOU ARE REALLY PISSING A LOT OF BUYERS OFF THAT YOU WILL NOT SEE RETURN
G D it I DO NOT WANT A SUV!!!!!!!!!
My wife loves SUVs, I do not! In the past it was station wagons, then pickups and since @ 1990, it has been a variety of SUVs or whatever you call them! A variety Jimmys, an Oldsmobile Bravada, Cadillac SRX (twice), GMC Acadia Denali (2016), and now a new Terrain Denali. As I said, she likes them and I don’t.
Anyway, here are a few of my thoughts: A SUV or Crossover, or whatever you want to call it is taller, so stability can be a concern. In my Cadillac sedans, I don’t worry about someone tempted to steal something in my trunk; after all, stuff is not exposed to the naked eye like it usually is in an alternative vehicle, or whatever you want to call it.
In the winter, my sedans heat inside much faster and in the summer they cool down much faster, not something many consider when rolling out the cash for an SUV, but less volume is easier to heat and cool.
When I start my Cadillac sedan, it sounds like a real engine is under the hood instead of some pip squeak lawnmower engine like the one on my wife’s Terrain! Of course, when you’re inside, my car is deathly quiet, more so than my wife’s new Terrain!
I get better fuel economy with my sedans than my wife does on her SUVs, and even with more powerful engines in my sedans.
And here’s the clincher… when we go out or travel, guess which vehicle is the one of choice?
Great move GM, just give the Asians a ton more sales and profits. They are laughing at you. They will definitely regret killing off the Cruze.
I agree that GM and Ford must keep selling midsized and large sedans. I have a Equinox and a Fusion Hybrid (the Malibu Hybrid is weaker), and we use the hybrid sedan over 80% of the time.
I’m a car buyer and always will be. We do have an SUV and it’s good for what it is but I like my car. The industry left me behind a few years ago. I like a large luxury car. You can’t by a large car with a V8 any more. You can buy a mid-size luxury car (Cadillac XTS or CT6, for example), but the only way to get a V8 is an expensive package of options that I don’t want. I buy a car to drive; the industry wants me to buy a car that drives me. I buy a car with basic luxury (power options, smooth quiet torque of a v8 engine, basic stuff); the industry wants me to buy a car laden with technology wizardry that I will set once and never again. The last 3 cars that I bought, I really didn’t like (2 Cadillac XTS and a Cadillac CT6). These cars are dreadfully expensive with a large component of cost coming from smart technology devices that I don’t want and don’t want to pay for. I’m sure that many do, but not me. Earlier this year, I purchased a gently used Cadillac DTS – no center console (lot’s of leg room), good entry height (not 1″ off the pavement), a very quiet but powerful V8 engine (not a V6 gasping for air under interstate acceleration), and I love it. Usually, the 2019 CT6 sits in the garage while I drive the DTS which I enjoy far more. After buying a new car every 18 months for the past 30 years, I’m out of the market for new cars. If I were buying, I’d buy a car, not an SUV, but I’m far more likely to buy a good used car because they no longer make the kind of car that I want. I gladly surrender my spot in the car-buying public to a young person that likes what they are marketing these days.
I’ll just hold out until GM releases a nice b/c segment hatch. They almost have it with the regal sportback. plenty of power, but the platform is a bit too big, loose. They just need to put a ~200+ hp/ torque into a true hatch, maybe even slap an SS badge on a hatch sonic 😉
If they don’t have that option available in 5 years when I need to replace my Sonic GM will lose my business. I’ll just buy a Mazda or Volkswagen.
I like the bolt, but I’m not sure I’m at the point in my life where an electric vehicle makes sense logistically.
Well, I guess the American car makers voluntarily cede the car market to Tesla and Honda/Toyota/Nissan. We tend to prefer cars and recently got a model 3. I think part of the problem is that the American small cars are just a little boring.
Our past Civics, Accords and Prii were very reliable, as was our Spark EV. I perceive quality as a factor but haven’t owned an American gas car (just the Spark EV, which was fine).
I hate pickup trucks and suvs I’ll keep driving my older model caddy until it dies than buy a new Camry
SUV’s and pickup trucks are a deadly hazard on the road. Because they’re so big, drivers behind them can’t see what’s up ahead, and that’s an accident waiting to happen.
Wait… what? hahahahaha