Midsize Sedans: A Light in the Storm?
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MORE: Compare-Rank All Sedans by Specs and Dimensions
Special to The Auto Channel
By
Jim Koscs
AIADA Contributing Editor
It may be too early to gauge how various auto segments are
going to play out through 2009. After reviewing data for 2008 and speaking
with industry experts, however, one segment seems to offer some light in
the storm: midsize cars gained market share in 2008 and may do so again in
2009.
Midsize cars as a group fell by 7 percent in 2008 compared to the industry’s 18 percent drop. Midsize cars gained market share at the expense of others, including SUVs and crossovers, according to Edmunds.com Senior Analyst Jesse Toprak. Midsize cars took 16.5 percent of an admittedly smaller market, vs. 14.6 percent in 2007. Toprak expects that, even in another down year, midsize cars could again gain market share.
All things considered, midsize sedans did well, especially those priced under $25,000. “That’s the magic number,” Toprak said. “Consumers are making what they feel are ‘safer’ choices, and that is the nature of the midsize car. It’s a safe choice.”
AIADA Chairman Russ Darrow also sees growth potential for the midsize segment. “A huge percentage of customers are looking for the best possible value, and with midsize cars, it’s easy to spot the better models,” he said. Darrow added that, with the decline of leasing, resale value is rising in importance for midsize car buyers. “Consumers are paying close attention to crash-test results, too.”
Increasing competition and rising quality are helping the segment, according to David Champion, Consumer Reports magazine senior director of auto testing. “Midsize sedans may lack the versatility of an SUV or wagon, but they’re very refined and deliver good gas mileage. You could be happy with any of the top-six (Consumer Reports-rated) models. All offer something slightly different. It really comes down to personal taste,” he said.
A New “Big Three”
Three
nameplates accounted for nearly 1.1 million passenger car sales last year:
Toyota Camry, including Solara models, with 436,000 sales (down 7.7 percent
from 2007); Honda Accord with nearly 373,000 sales (down 5 percent from
2007) and the Nissan Altima with 270,000 (also down 5 percent). Put another
way, those three nameplates took 50 percent of their segment and 15 percent
of all passenger car sales. The next closest competitor, the Chevrolet
Malibu, was 100,000 units behind the Altima.
The highly rated Hyundai Sonata surprised some with its near-20 percent drop from 2007. Toprak blamed higher transaction prices and lower incentives in 2008. When Hyundai introduced its Hyundai Assurance Plan earlier this year, along with higher cash incentives, sales jumped. Although Hyundai has earned gold stars for quality, and its cars test well against Honda, Toyota and Nissan, customers still expect a “deal” relative to those brands, according to Toprak. “Perception still needs to catch up with the brand’s rapid product improvement,” he said.
Fours to the Fore
Last year’s fuel price
spike, combined with the deepening recession, impacted the split between 4-
and 6-cylinder sales in the midsize segment. For AIADA’s look at
midsize cars at the end of 2007, Nissan reported that 4-cylinder models
accounted for 80 percent of Altima sales. That figure rose to 90 percent
for 2008, according to Nissan spokesperson Darryll Harrison. It was a
similar story from Toyota, which reported approximately 80 percent
4-cylinder share for the Camry in 2007 and 88 percent for 2008. A quarter
of Honda Accord buyers chose the V6 in 2008, down a bit from 30 percent
during the latest model’s launch.
From Bland to Grand
The automotive media
occasionally derides midsize sedans as “bland,” but new models
may be changing that perception among customers. Though Consumer
Reports rates cars according to objective test scores and
owner-reported reliability, Champion acknowledged the growing demand for
more pizzazz in the segment. “Midsize cars are increasingly becoming
more stylish and sporty,” he said.
Champion singled out the new Mazda6 for its sporty styling
and handling manners. The new model, though larger than its predecessor,
retains a sporty flavor and adds new luxury features. Although this boldly
styled sedan met Mazda’s expectations for the September-October
launch period, the economy has taken its toll so far this year.
Acknowledging lower-than-expected sales volume, David Dildy, vehicle line manager for the Mazda6 said, “We are satisfied with our market share of the segment, and customer and media acceptance of the new car has been very strong.” Customers are going for the upmarket models, too. Most 4-cylinder Mazda6 customers choose the second-from-top Touring trim line, while most V6 buyers opt for the top Grand Touring.
Champion pointed out that growing roominess is adding to midsize sedans’ appeal, as well. Honda Accord models (without sunroof) and the Hyundai Sonata both just cross the Environmental Protection Agency’s 120 cu. ft. total interior room threshold that defines a car as “full size.”
Though midsize cars have grown in size and roominess over the past decade or so, Darrow does not believe the market is calling for further size gains. “The customers still want a midsize exterior package,” he said. Indeed, Hyundai simply touts “class above interior volume” for the Sonata on its website, avoiding the term “full size.”
