Both General Motors and Ford had banked on former Chevrolet Cruze and Ford Focus owners moving up to one of their small crossover vehicles like the Chevrolet Trax or Ford EcoSport after they discontinued their respective compact offerings, but not all are willing to move away from the segment, it seems.
According to a new report from Edmunds, the number of Cruze owners trading their car in for another Chevrolet vehicle fell from 57% in 2016 to 45% in 2019. The situation may get worse for Chevy going forward as well, as 9% of Cruze trade-ins so far in 2019 have gone toward another Cruze. This won’t be an option in the future, as Chevy will eventually run out of new Cruzes in stock, so more buyers of the vehicle may be set to flock from the brand.
The Edmunds report, called Shuttered Car Lines, also found that Focus owners trading in their car to buy another Ford vehicle decreased from 40% in 2016 to 33% in 2019. Ford may also see customer loyalty decrease even further in the future as it prepares to discontinue virtually all of its cars, apart from the Mustang.
Additionally, the report found that while compact-car sales are trending downward for the entire industry, many current compact-car owners are still buying another one when they go to trade their vehicle in. About 22% of Cruze trade-ins go toward another compact-car purchase, it found, while 21% of Focus trade-ins go toward a new compact car.
Many Cruze and Focus owners will trade up to a similarly sized crossover, however. Crossovers are the most popular vehicles that Cruze and Focus owners trade in for, the study found. Both GM and Ford’s respective compact and subcompact crossovers are the most popular vehicle choices for those trading in either a Cruze or a Focus as well.
Edmunds data for the study was compiled using retail sales transaction numbers. In a statement made to Autoblog, an Edmunds spokesperson said that “compact cars account for more than 9% of the new-vehicle market, and it’s not likely to drop to 0%, especially given the fact that the average price of a new car is in record territory.” Therefore, GM and Ford will no matter what lose some market share by not offering any compact cars – though how much of an impact this will have on both companies’ business remains to be seen. A large part of cancelling compact cars was to get customers into more-profitable crossover variants, and this does seem to be at least partially working at the moment.
You can read the entire Edmunds report at this link for further insights on the topic.
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Source: Ford Authority
Comments
I think there is room in the marketplace for the Cruze (possibly a Mexican import now) and the Malibu. The current generation Cruze is underwhelming….but even a bland but affordable, reliable compact is a common “first car” for a lot of young people.
Those are all going to Toyota, Honda, Hyundai, Kia, VW, and Nissan now.
And the Malibu needs an AWD option and a tall wagon variant similar to the Outback.
Did GM and Ford learn anything, anything, when they abandoned the midsize truck market in the 1990’s giving that whole segment over to the imports? While I understand the money aspect of the move to ditch small(er) less profitability cars, but there is still a market for them. Both Honda and Toyota move over 300,000 Civics and Corollas annually.
Just make a Malibu hatchback with roof rack standard and sell it to millennials.
A case of GM abandoning it’s customers. They most likely won’t return, either. When our HHR was ready to trade in there was nothing in the Chevy line-up that was a replacement. Cruze Hatch wasn’t being sold in USA at time. We got an Impreza hatch.
it is not true than every body want trade their car like a cruze or a Malibu for and S.U.V. The day GM will no longer offer a car to their consumer they are going to the door of Honda, Mazda, Hyundai, and Kia, and Nissan. Theses compagnies offer right
now a new generation of theses cars. And then no longer they knoch to the door of a chevy dealer.
Ford is in a worse position then GM for that regard for cars outside of Europe but I’ve heard Lincoln is getting a CD6 gas powered sedan with a Ford counterpart for all Ford’s markets, nice but that leaves the small car buyers cold..
GM never said they dropping cars completely, I’d notice the Spark and Malibu had noticable upticks in sales, the Sonic IMO is done because it’s too expensive to make as a subcompact in the US with slow sales and as the GEM cars take Sonic’s place in economic-challenged markets. Spark would probably take it’s place and Malibu can be the main fwd Chevy sedan. I’d doubt you’ll see a Cruze replacement from GM unless it’s electric.
Really hate to be that guy but what did I say about GM ridding themselves of the lackluster effort Cruze?
A lot of people love that size Sedan and they will just get upset and migrate to Toyota, Honda, Nissan, Hyundai, Kia, Subaru, and Mazda. All of which miraculously not only did not get rid of their Sedans, but offered mostly All New ones. What a joke.
Just another of many examples of how the Bean-Counters keep slowly destroying GM one lackluster release and or Model cancellation at a time.
What is so lackluster about the current Cruze besides GM’s idiotic packaging structure? I have driven many and was very impressed by each one. The 2019 even addressed the stop/start with a defeat switch, the 1.4t is peppier than other rental Focus and Elantra’s I have driven, the 6 speed automatic they use is superior to Ford’s junk dry clutch crap and the CVT’s Nissan and Toyota have been using and this car positively slaughters any Corolla or Sentra that came out prior to 2019. it is a very decent car for the prices they have been selling for.
Gm isn’t leaving the market because there is no market for cars, it’s that sedan buyers are loyal to other brands and have refused to switch to gm. They have decided it’s better to be the king of SUV’s and crossovers (which they are and are financially making a killing) than take funds away from SUV and crossovers for a money sink.
Reading the other comments above with mixed thoughts. My take:
It was (is) the lack of sedan customer’s that has forced GM/Ford/Chrysler to leave that market in the first place. I think we can all agree that it isn’t a smart business decision to continue offering a lot of something that isn’t selling. It is a smart business decision to go after the market and money. Don’t get me wrong, I certainly feel that they must keep a couple sedan/small cars around and give buyers something to at least look at. Chevy must keep the Spark and Malibu around. Ford really should keep the Fiesta and Fusion (too late there). FCA? Way too little, too late! But here is a better question: why keep a certain product around that ends up selling well to fleets? And for those who keep talking about Toyota, Honda, Kia, Nissan, etc, just take a good hard look at how many of those cars are flooded into Hertz, Enterprise and other rentals. Unless something big changes, you will see those brands following GM and Ford’s steps.
Not likely to see the imports ditch compacts. I see a ton of Corollas and Civics. Both sell in the range of 300,00 units (that’s 600,000 cars annually) – I don’t see a lot of Honda’s at rental agencies. The question at hand is will those GM/Ford/FCA small car consumers opt for a small SUV or will they stick to cars and make the switch over to the Toyota/Honda/Mazda? If they switch over to the imports there is a good chance that former GM/Ford customer is now a loyal Toyota/Honda shopper when it comes time to buy their next vehicle.
To make money in the sedan segment you need to have a global car. Just selling in one, two or three markets will not cut it.
Even then you have to build them cheaply to make any kind of money.
If you note most sedans in this country are built overseas or built here in non union plants. Most are models sold around the world to carry volumes high enough to make them worth while.
GM just does not have a global car like they used to as what is sold overseas will not work here well and what we had here was too expensive and not equipped to meet the imports.
Note even the plants here for Hyundai also have younger work forces as they hired younger workers and have little to no legacy cost..
On the other hand sales are still declining on all sedans and the CUV models are nothing but going up. Higher profits are also to be had. This trend is not going to change anytime soon.
GM could have stayed in the car segment but and made a minimum of profit while they could take that same investment and nearly double the return on investment in the CUV segment.
As for MPG I wish people would drop this argument as it is no valid. We today have models that get the same MPG as the cars they replaced. We are not talking Malibu for Suburbans here. We are comparing Malibu to Equinox.
The bottom line is the big three have the same issues and all three have made the same choice to get out while the getting was good.
You can pout, complain and try to justify the American car but the money is just not there for the Automaker with the situations they are in.
Even Companies like Hyundai will in time eliminate their cars here as they keep bringing out new CUV models. Look a their latest commercials and no a car in them.
Both GM and Ford are abandoning the small sedan market to the imports. I see many buying cheap South Korean cars because they are CHEAPER. My neighbor’d daughter had a Chevy Lumina which I helped support since it shared parts and servicing with my 1995 Buick Regal. Now she has a Kia sedan, which is smaller and less spacey but its small 4-cylinder engine uses less gasoline than the V6 of the Lumina (her reason). Neither Ford nor GM has locally promoted their hybrids or electrics (the Volt and Bolt EV are offered but never promoted), so if gas prices climb again, more small imports will be sold.
The reality that most of you are missing was that Ford and GM didn’t just decide to abandon this market because they are big meanies or something. Don’t forget that FCA made the same call before either of them.
They left this market because they couldn’t make money on small cars.
It started in the late 80s and early 90s with little economy cars that weren’t profitable to build here with the expensive labor they employed. Eventually they weren’t able to make money on the slightly larger cars, like Focus or Cruze.
Soon, they probably wouldn’t be making anything on midsize cars either. Ford seems to think so already.
Trucks are keeping them alive. I wouldn’t be surprised if the Equinox is a nearly break even vehicle at this point.
Get mad and outraged all you want, but a business cannot afford to lose money on the products they sell.
The way some people write here, are we supposed to believe the Marchionne proposal for a Dart and 200 build partner was just a bs bluff? It’s old news now, but does anyone know the specifics of it? With whom? How many?
There’s not enough market share for General Motors to continue building the Cruze in the United States; thus, one has to wonder whether it would make sense to import the Cruze from Mexico or China.
They Push certain vehicles. Consumers by what they see they look at vehicle purchases just like purchasing a refrigerator or washer and dryer. Unfortunately non enthusiast control the market.
Just as I predicted. They will pay for this stupidity one way or another. Just last night I was speaking with an older friend of mine that fell on hard times and had to give up driving and turned his Impala in because they didn’t believe he would walk again. Well 6 months later they rehabbed him and he is walking again so thus needs a cheaper lower cost car. Being a GM guy he asked me about the Cruze which I had to explain they are eliminating thus few are still left on lots the way he would order one. He is also looking at a lower trim level Regal but those are well over 20K. He doesn’t want an upside-down bathtub CUV as he calls them. A new LT Cruze can be had for around 17995 but few are left on dealer lots. Too bad GM just lost yet another customer