Flurry of product reshapes big-sedan segment

Mass-market brands add touches usually seen on luxury cars

The redesigned Toyota Avalon is one of the new entries that may rejuvenate the segment.

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• Design
• John Krafcik
• Bob Carter
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• Chevrolet
• Impala
• Hyundai
• Azera
• Toyota
• Avalon
• Sedan
• United States
• Mark Reuss
• Hyundai Brand
• Toyota Brand

There was John Krafcik at the New York auto show this month, climbing all over the redesigned Toyota Avalon that had just been unveiled.

Just another large, boring sedan from a nonluxury brand? Actually, Hyundai's hyperactive U.S. chief liked what he saw and loved the fact that the Avalon and another New York debut, the Chevrolet Impala, were arriving at about the same time as the new Hyundai Azera.

With all that action, Krafcik figures the moribund family sedan category will get a triple dose of marketing clout.

"I think you are going to see the segment grow," he said.

Volume brands are trying to do with the big sedans what they did with small cars -- add features, gussy up the interiors, liven up the sheet metal and lure shoppers who otherwise wouldn't take a second look at the segment.

Not everyone believes it will happen. Sales of full-sized sedans have been slipping for years. But the three new ones -- equipped more like luxury cars than family sedans -- could breathe life into a segment that 25 years ago accounted for about 10 percent of U.S. light-vehicle sales and now is less than half of that.

The three new ones offer dramatic styling and such amenities as precollision and blind-spot warning systems and noise cancellation -- features normally found only in premium brands. It's a new direction for the big cars.

GM's Reuss: No "true family sedan" since '86

Crossover competition

"We really haven't had a true family sedan since I've been within the company -- since 1986," said Mark Reuss, General Motors' president for North America.

Who killed the big family sedan?

"Mostly it was shoppers continuing to migrate to SUVs, specifically crossover products," said Ed Kim, an analyst at AutoPacific in Tustin, Calif.

The segment has been tailing off since the early 1990s, when big SUVs took hold in the United States. But Kim said the decline accelerated about a decade later when mid-sized sedans grew larger.

"The Accord and Camry got really big, setting the template for other mid-sizers like the 2003 Nissan Altima and 2006 Hyundai Sonata," he said.

The current Camry is 7 inches longer than the Camry of 25 years ago and almost 2 inches longer than Toyota's big Cressida sedan of that era.

In the past decade, sales of big sedans such as the Impala, Avalon and Ford Taurus -- as well as mid-sized sedans -- have been undercut by mid-sized crossovers. But Darren Post, the Impala's vehicle line director, said buyers are ready for a change.

"There's almost a love-hate for sport-utilities now," Post said. "People are starting to want to consider cars again. We're offering a lot of space and utility and options."

Bob Carter, head of Toyota Division -- which sold 28,925 Avalons last year, down from a peak of 104,078 in 2000 -- expects full-sized sedan sales to bounce back.

"Sales improve if you come out with significant product," Carter said. "Go back into 2010 and people were saying mid-sized sedans are not relevant. But good value, good mpg, good packaging is relevant. That's what's going to happen in full-sized sedans too."

The 2014 Chevrolet Impala: "A different beast than the version it's replacing."

Coupelike styling

In addition to styling that mimics the flashy, coupelike Audi A7, the redesigned Avalon features high-class touches such as ambient interior night lighting, paddle shifters, 10 airbags, an impressive telematics suite and precollision and blind-spot warning systems. The 2013 Avalon will be priced about the same as the current model -- $33,955, including freight -- when it goes on sale this fall, Carter said.

At the New York show, Krafcik heaped praise on the Avalon, pointing out, for instance, the hand stitching of the leather on the instrument panel and around the cupholders.

In the Impala, GM has added active noise cancellation -- a feature from Cadillacs -- in a package of acoustic measures meant to create a quiet cabin.

GM will pack the Impala with several optional safety features typically found on luxury cars, including lane-departure warning and a collision-alert system that applies the brakes -- both firsts for a Chevrolet. For fuel misers, an optional 2.4-liter, four-cylinder Ecotec engine will deliver 35 mpg on the highway.

Generally, the big sedans tend to get better fuel economy than mid-sized crossovers. Most big sedans get about 19 mpg in the city and range up to about 30 on the highway. Mid-sized crossovers such as the Chevrolet Traverse, Toyota Highlander and Dodge Journey get about the same fuel economy in the city, but their highway fuel economy peaks at about 25 mpg.

IHS Automotive consultant Chris Hopson called the Impala "a different beast than the version it's replacing" but said Impala's retail gains will not compensate for the expected decline in fleet sales.

The Impala was the volume leader in the segment last year, although nearly 75 percent of the 171,434 units sold went to fleets. Chevy plans to dial those fleet numbers way back with its redesign and hopes retail sales can pick up the slack.

"The reason why we're selling a lot of fleet on the car is simply because it's an old car," Reuss said. "We're going to aim this at both retail and fleet. We're designing the car to really do both."

Still, Krafcik sees opportunity in the segment. Consumers won't walk away from crossovers, he said, but they might trade in a smaller luxury-branded car for a larger mass-brand sedan.

"I could see people substituting an Avalon or Azera for the Lexus ES, Infiniti G or Acura TL," he said. "You get so much car here. People don't need the premium badge. They are confident in their brand selection."

The nonluxury large sedan segment, including the Impala, Avalon, Taurus, Chrysler 300, Dodge Charger and Nissan Maxima, last year accounted for 557,205 sales, or 4.4 percent of the U.S. market, according to the Automotive News Data Center. That was down from 7.2 percent in 2006.

"They did see a blip around the time that the Chrysler [300] arrived on the marketplace, demonstrating that really inventive and desirable product can breathe life into a segment, even one that's declining," said AutoPacific's Ed Kim. "Of course, as those cars aged, so did the segment."

Kim is not convinced that the new entries will send consumers back to large sedans in big numbers, especially since mid-sized models have become large themselves.

AutoPacific predicts segment sales will remain relatively flat through 2017.

He said that because of concerns over fuel economy, small and mid-sized sedans "remain the sweet spot in terms of sedan size for Americans."

You can reach Mark Rechtin at mrechtin@crain.com. -- Follow Mark on

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