A fast-changing segment is the industry's hottest
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Lower fuel prices, attractive incentives and a batch of eye-catching, redesigned models here and just around the corner are lighting a fire under mid-sized car sales.
Combined U.S. sales of the top six mid-sized cars shot up 37 percent in June, compared with gains of 25 percent for all cars, 19 percent for light trucks and 22 percent for the industry as a whole.
Those six nameplates alone accounted for nearly a quarter of all car sales in June.
Deal-conscious customers are taking advantage of incentives on outgoing 2012 models. And those looking for the latest technology and improved fuel economy are lining up to buy 2013 models that are starting to arrive in showrooms, many of which will feature big increases in fuel economy compared with previous models. That should ensure the segment's newfound strength will be more than a one-month blip.
Recent arrivals in the market include redesigned versions of the Toyota Camry, Chevrolet Malibu and Nissan Altima. A redesigned Ford Fusion and Honda Accord will arrive in the fall. The Hyundai Sonata has continued to sell well since its early-2010 redesign.
"We expect mid-sized growth to continue, as four of the five top-selling mid-sized sedans, including the Ford Fusion, will feature major revisions," said Erich Merkle, a sales analyst at Ford Motor Co. "Fuel efficiency continues to be top of mind.
Customers who might have downsized reluctantly to a compact car if gasoline had stayed at $4 a gallon now are able to stay with a roomier mid-sized car.
Aaron Bragman, senior analyst for IHS Automotive, said: "We're seeing mid-sized sedans doing so well because you're still able to get the kind of room people like, and now with increased fuel economy."
In June, Chevy Malibu sales shot up 32 percent from a year earlier, to 31,402, as cash incentives lured buyers of 2012 models. That made the Malibu the surprise No. 2 seller among all cars, behind the Toyota Camry.
Only about 2,000 of those sales were of the 2013 redesigned Malibu, which was launched in the spring with only one engine choice: a 2.4-liter inline four-cylinder teamed with General Motors' eAssist mild hybrid system.
In August, GM will put a new 2.5-liter engine in the redesigned Malibu and by fall will add a 2.0-liter turbo to the lineup. In August, 2013 models should account for most Malibu sales, said Kurt McNeil, GM's vice president of sales operations.
"The last two months have been exceptionally strong for Malibu," McNeil told analysts and reporters last week during a conference call. "We are in great shape for the next phase of our 2013 model year rollout."
Ditto at Nissan Motor Co.
The 2013 Altima, arriving now in dealerships, has an EPA rating of 27 mpg city/38 highway, a dramatic improvement over the 23 mpg city/32 highway for the outgoing 2012 model. And the sticker price has changed little.
So Nissan was blowing out the 2012s in June to make room for the 2013s. Altima sales rose 12 percent to 21,812, with all but a few of those being 2012s. July will be the first month to see significant sales of the 2013s.
Toyota and Honda have roared back from their post-earthquake slumps. Sales of the Toyota Camry shot up 50 percent to 32,107 in June compared with June 2011, making it once again the best-selling car. Sales of the Honda Accord surged 84 percent to 28,924.
The 2013 Ford Fusion doesn't arrive until fall. But that didn't stop the 2012 model from setting a record in June, spurred by incentives such as a $179 a month payment on a 24-month lease.
Ivan Drury, senior analyst for Edmunds.com, said that among shoppers who looked at more than one vehicle segment, mid-sized sedans were more likely to be included in the search than any other category. For example, 41 percent of compact-car shoppers using the Edmunds Web site looked at mid-sized cars, too.
Drury said: "If you look at it from an all-around perspective, at what car would fit most people's day-to-day scenarios, mid-sized cars fill the bill like no other."
Mike Colias contributed to this report
| Mid-sized muscle | ||
| A sampling of mid-sized cars' June U.S. sales, vs. the industry. | ||
| Nameplate | June sales | change from June '11 |
| Toyota Camry | 32,107 | 50% |
| Chevy Malibu | 31,402 | 32% |
| Honda Accord | 28,924 | 84% |
| Ford Fusion | 24,433 | 17% |
| Nissan Altima | 21,812 | 12% |
| Hyundai Sonata | 20,931 | 12% |
| Total industry | 1,285,499 | 22% |
You can reach Bradford Wernle at bwernle@crain.com.
