Michael O'Brien, vice president of product and corporate planning at Hyundai Motor America, says high levels of standard equipment and features such as Bluetooth and advanced safety technology are winning over shoppers.
"When you think about an average trade cycle of about four or five years, there's all of this technology that's become standard," O'Brien said. "When these people come back to the market, they see a tremendous amount of content that wasn't even available when they bought their last product."
Upscale touches such as power seats with standard leather are also helping the Azera pick off customers who previously owned vehicles from luxury brands, O'Brien says. Lexus was the No. 4 most frequently replaced brand for Azera buyers, and Cadillac was No. 5, he says.
Polk registration data for fleet and retail customers show the full-sized sedan segment's U.S. market share has declined consistently over the past five years, from 6.1 percent in the first four months of 2008 to 3.7 percent for the comparable period of 2013.
Tom Libby, senior analyst at Polk, doubts the recent uptick in retail sales signals a major recovery in the segment.
"This is not a slight decline; it's declining considerably," he said. "This is not inconsistent with other large-vehicle segments such as the large-SUV segment and large-luxury-car segments. It's part of a trend of the industry shifting down towards smaller vehicles."
That shift has been made possible by compelling new mid-sized products, which now come with a range of advanced features and powertrains, such as efficient hybrids and peppy turbocharged engines.
"A family-oriented prospect who wants a family sedan can get all they want from a mid-sized sedan, and the data show that's where they're going," Libby said.
For automakers, the challenge is to create more separation between large and mid-sized sedans by giving big cars more interesting styling and pouring in standard features to align them more closely with large luxury sedans.
General Motors spokesman Chad Lyons says the company positioned its redesigned Impala, which went on sale this spring, differently from the outgoing Impala, which was popular with fleet customers and with retail consumers seeking value and roominess. The redesigned model is being positioned as a safety and technology leader with the latest version of Chevrolet's MyLink infotainment system, 10 standard airbags and a lane-departure warning system, he said. Looks are part of the proposition, too.
"The top reason for purchase in the segment now is exterior design," Lyons said. "We positioned this car heavily on the way it looks."
Lyons says Chevrolet expects Impala sales to be split 75-25 in favor of retail, as opposed to the other way around for the outgoing model.
The beefed-up list of equipment has elevated sticker prices. The redesigned Azera's base price jumped more than $6,000 compared with the model it replaced, and the redesigned Impala's base sticker is $850 more than that of its predecessor.
The new Cadenza, which went on sale in April, starts at more than $36,000, and high-end options such as panoramic sunroof and adaptive cruise control can push that cost to about $42,000. Kia says it sees a growing niche between mainstream and luxury sedans that will support about 11,000 sales of the Cadenza annually.
Alec Gutierrez, senior analyst at Kelley Blue Book, calls the Cadenza a "fantastic" vehicle, and one that underscores changes in the segment. In 2008, large sedans were sold with heavy incentives to buyers looking for good deals.
Nowadays, he says, "you're going to see a completely different demographic looking at the segment, someone with higher net worth, higher household income and someone who's cross-shopping against the luxury segments."