{"id":24471,"date":"2019-12-12T17:29:17","date_gmt":"2019-12-12T21:29:17","guid":{"rendered":"http:\/\/henrypayne.com\/?p=24471"},"modified":"2019-12-12T17:29:17","modified_gmt":"2019-12-12T21:29:17","slug":"as-ford-chevy-exit-sedan-market-asian-makers-gain-share","status":"publish","type":"post","link":"https:\/\/henrypayne.com\/index.php\/2019\/12\/as-ford-chevy-exit-sedan-market-asian-makers-gain-share","title":{"rendered":"As Ford, Chevy exit sedan market, Asian makers gain share"},"content":{"rendered":"<p><div align=\"left\"><img decoding=\"async\" src=\"https:\/\/www.gannett-cdn.com\/presto\/2019\/12\/10\/PDTN\/957eee5a-5a6e-4d4f-9479-4eedb4a41c0e-2019-1210-mo-Sedan132.JPG?width=540&amp;height=&amp;fit=bounds&amp;auto=webp\" alt=\"Joe Busch, sales consultant at LaFontaine Hyundai in Dearborn, wipes the ice off of a 2020 Elantra SEL Tuesday. Hyundai saw sales of its compact car increase 102% this November over last year.\" \/><\/p>\n<\/div><p>Joe Busch, sales consultant at LaFontaine Hyundai in Dearborn, wipes the ice off of a 2020 Elantra SEL Tuesday. Hyundai saw sales of its compact car increase 102% this November over last year.\u00a0<span class=\"credit\">(Photo: Max Ortiz, The Detroit News)<\/span><\/p>\n<p class=\"speakable-p-1 p-text\"><em>Phoenix \u2014<\/em>\u00a0A year after Ford and Chevrolet\u00a0abandoned the compact-car segment to prioritize SUVs, buyers are abandoning those makes and shopping for cars made by\u00a0Hyundai, Toyota\u00a0and Honda.<\/p>\n<p class=\"speakable-p-2 p-text\">Some 42% of Ford Focus and Chevy Cruze compact car owners have stayed in the compact car segment with a significant percentage buying competitors&#8217; vehicles, according to an industry study by Edmunds that finds a deterioration of market share for the Detroit makes,\u00a0and a decline in brand loyalty.<\/p>\n<p class=\"p-text\">Hyundai, for example, saw sales of its Elantra compact car increase 102% this November over last year. The brand has also introduced an all-new 2020 mid-size Sonata that \u2014 like the all-new Toyota Camry and Honda Accord introduced in 2018 \u2014\u00a0the automaker hopes will capture buyers who still want sedans.<\/p>\n<p class=\"p-text\">\u201cThere are 6.5 million car owners who do not have a successor sedan for them from their manufacturer. Forty-four percent of those say they want a sedan, so if you look at the raw numbers, there are still a lot of buyers out here,\u201d Hyundai Vice President of Product Planning Mike O\u2019Brien said at a media test of the new Sonata in Phoenix.<\/p>\n<p class=\"p-text\">He noted that since Chrysler dropped its 200 sedan after the 2017 model year, there\u2019s been an exodus of 20 nameplates from the sedan market.<\/p>\n<p class=\"p-text\">The Edmunds study focused in particular on compact cars,\u00a0which is the biggest car market \u2013 at 9.1%\u00a0of share \u2013 in the United States\u00a0today. The Ford Focus and Chevy Cruze have both left the segment in the last year as the Detroit makers concentrate on market demand for SUVs.<\/p>\n<p class=\"p-text\">To be sure, a healthy share of former Focus and Cruze owners are acting as Ford and Chevy hoped:\u00a0by\u00a0moving into one of their SUVs. To date this year, 18% of Focus owners traded for a Ford SUV, while 21% of Cruze owners traded\u00a0for a Chevy SUV.<\/p>\n<p class=\"p-text\">But those buyers tend to have extra cash to spend as small SUVs can cost between $4,000-$8,000 more than a small car, reports Edmunds. As a result, those staying in the compact car segment are increasingly turning to the remaining foreign brands.<\/p>\n<p class=\"p-text\">Dearborn is home to Ford&#8217;s headquarters. It\u00a0also is home to Metro Detroit&#8217;s largest Hyundai dealer, LaFontaine Hyundai \u2014\u00a0a distinction driven, in part, by customers&#8217; desire for a compact alternative to the discontinued\u00a0Focus.<\/p>\n<p class=\"p-text\">&#8220;We&#8217;ve seen a lot of interest in the Elantra since Ford left the compact market,&#8221; said Lafontaine sales manager Steve Hunsinger. The Elantra is prominently featured on the dealership&#8217;s\u00a0website.<\/p>\n<p class=\"p-text\">Determined to compete in the Detroit Three&#8217;s backyard, Hyundai matches Ford&#8217;s friends-and-family discount by offering Michigan buyers its own employees&#8217; discount. Hunsinger says that, in addition to meeting demand for an affordable compact, the Elantra also benefits from Hyundai&#8217;s best-in-industry, 10-year\/100,000-mile drivetrain warranty.<\/p>\n<p class=\"p-text\">\u201cFord and GM made a strategic decision to prioritize profit at the expense of market share,\u201d said Edmunds auto analyst Jessica Caldwell. \u201cWhile this may set them up better in the long run so they have the cash they need to fund electrification and autonomy, there\u2019s no question that decision is giving their competitors an edge now.\u201d<\/p>\n<p class=\"p-text\">Focus owners trading in their car to buy another Ford vehicle decreased from 40% in 2016, to 33%\u00a0 in 2019. The drop in brand loyalty has been steeper among Cruze owners \u2014 from 57% of owners trading in for a Chevy in 2016, to 45%\u00a0this year.<\/p>\n<p class=\"p-text\">Asian carmakers have benefited:\u00a0the Honda Civic picked up 4% of former Focus buyers, the Toyota Corolla 3.5% and Hyundai Elantra 2.3%. Cruze trade-ins for Civics and Corollas nearly doubled from 2016 to 2019.<\/p>\n<p class=\"p-text\"><span class=\"exclude-from-newsgate\"><strong>More:\u00a0<\/strong><a href=\"https:\/\/www.detroitnews.com\/story\/opinion\/columnists\/henry-payne\/2019\/11\/13\/review-test-2020-honda-civic-si-just-wants-have-fun\/2553539001\/\" target=\"_blank\" rel=\"noopener\" data-track-label=\"inline|intext|n\/a\">The racy Honda Civic Si just wants to have fun<\/a><\/span><\/p>\n<p class=\"p-text\"><span class=\"exclude-from-newsgate\"><strong>More:\u00a0<\/strong><a href=\"https:\/\/www.detroitnews.com\/story\/opinion\/columnists\/henry-payne\/2019\/10\/24\/review-toyota-beautifies-corolla-making-wallflower-no-more\/4048658002\/\" target=\"_blank\" rel=\"noopener\" data-track-label=\"inline|intext|n\/a\">Toyota Corolla Hatchback is wallflower no more<\/a><\/span><\/p>\n<p class=\"p-text\">With the termination of the Ford Fusion and reported demise of the Chevy Malibu in a few years, foreign makers are hoping for the same playbook in midsize\u00a0sedans.<\/p>\n<p class=\"p-text\">That may be a tougher sell, given that midsize sedan sales have plummeted from 17% to 8%\u00a0of market share.<\/p>\n<p class=\"p-text\">But, says Hyundai\u2019s O\u2019Brien, &#8220;Not everyone hates their sedan. We see a healthy outlook for the future.&#8221;\u00a0 He\u00a0points to\u00a0the\u00a06.6 million Honda Accords that are on the road, and the\u00a07.2 million Toyota Camrys, 3.9 million Nissan Altimas and 2.2 million Hyundai Sonatas.<\/p>\n<p class=\"p-text\">The Detroit Three have\u00a0the profitable full-size pickup market virtually to themselves.\u00a0 But the midsize-pickup market can be seen as\u00a0a test case for brands that abandon whole segments: Ford left the declining mid-size pickup market in 2012 only to return in 2019 with Toyota\u2019s Tacoma dominant. Since re-entry, Ranger hasn\u2019t been able to command the share it once did \u2014 but it boasts a 49% higher price that&#8217;s in line with the company\u2019s profit-focused strategy.<\/p>\n<p class=\"p-text\">Asian automakers are hardly sedan-dependent.\u00a0Toyota, Honda and Nissan lead\u00a0the compact SUV segment where most mid-size sedan buyers have fled. Hyundai is prolific in SUV markets as well, becoming one of the first automakers to introduce three entry-level models \u2013 the compact Tucson, subcompact-plus Kona\u00a0and subcompact Venue coming next year.<\/p>\n<p class=\"p-text\">Tucson sales are up 116% in November, the Kona up 106%.<\/p>\n<p class=\"p-text\">But given the higher prices of SUVs\u00a0over cars, Asian automakers see the compact-sedan market as crucial to attracting first-time, low-income buyers into their brands.<\/p>\n<p class=\"p-text\">\u201cThe catch is, if Ford and GM don\u2019t have affordable options for shoppers who are buying their first or second new car, it could be much harder to win them over later,\u201d said Edmunds analyst Caldwell. \u201cCatching consumers early and keeping them in the family has been a basic tenet of automotive brand strategy for decades. But it feels like we\u2019re in the midst of a transformative time for the industry where automakers are being forced to rethink everything. Time will tell if it will end up the right call in the long run.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Joe Busch, sales consultant at LaFontaine Hyundai in Dearborn, wipes the ice off of a 2020 Elantra SEL Tuesday. Hyundai saw sales of its compact car increase 102% this November over last year.\u00a0(Photo: Max Ortiz, The Detroit News) Phoenix \u2014\u00a0A year after Ford and Chevrolet\u00a0abandoned the compact-car segment to prioritize SUVs, buyers are abandoning those [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"_links":{"self":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/24471"}],"collection":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/comments?post=24471"}],"version-history":[{"count":0,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/24471\/revisions"}],"wp:attachment":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/media?parent=24471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/categories?post=24471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/tags?post=24471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}