The big sedan shrinks into oblivion

After years of subpar cars, General Motors hit a home run with the 10th generation of its big, cushy Chevrolet Impala. Consumer Reports, notorious in Detroit for its favoritism toward imports, called the Impala the best sedan it had ever tested, and the car became an icon of the automaker's post-bankruptcy product renaissance.

"It's very luxurious," said Jake Fisher, Consumer Reports' director of auto testing. "In terms of ride comfort and quietness, it was really a standout. That's something that has really trickled down through the rest of General Motors' lineup."

Just four years later, the Impala's chances of reaching an 11th generation look grim. Sales are tanking. Production has slowed to a crawl. An average Chevy dealership now sees about one Impala customer every two months.

It's not a case of GM doing anything wrong, besides designing crossovers that today's consumers like better. The shift from cars has spelled trouble for many venerable nameplates, but it's been especially devastating for the Impala and other full-size sedans that once ruled American roads.

Hyundai this month said it was discontinuing the Azera after selling just 1,792 of them in the U.S. in the first half of the year. Chevy already has confirmed the demise of two other full-size cars, the high-performance SS and fleet-only Caprice. Ford is widely expected to cut the Taurus from its North American lineup, having limited the car's newest generation to China.

With no signs that the falloff for big sedans could ease, the Impala -- one of GM's longest-running and most-recognized names, a car that logged more than 1 million U.S. sales in 1965 -- appears unlikely to survive much longer. Its plunge into irrelevancy comes as GM is launching four redesigned crossovers this year and developing three new crossovers for Cadillac in the next few years.

Large cars are getting squeezed not only by crossovers, which offer greater utility and cargo space, but also by midsize cars, which cost less, get better fuel economy and have grown more spacious over the years to satisfy consumer demand and make fuel-economy targets easier to hit. While large sedans are often positioned as aspirational flagships for luxury brands, mass-market models carry little such cachet.

"No one's buying [Toyota] Corollas because there's an Avalon," Fisher said.

Hyundai, in announcing the end of the Azera this fall, attributed the decision to its new high-end spinoff, Genesis, and improvements to the midsize Sonata, which starts at about $12,000 less than the Azera and offers virtually the same amount of interior space.

"The Sonata has increased its appeal — it's got generous roominess and a lot of content at a very affordable price," said Hyundai spokesman Derek Joyce, "and then on the upper end we've got the G80 model from Genesis, which is rear drive but has good roominess and of course luxury-level amenities."

Despite the segment's bleak prospects, not every automaker is looking to get out. Toyota plans to release the fifth generation of the Avalon next year; the car is moving to the same modern platform that underpins the Camry and Lexus ES, signaling a commitment to the vehicle even though the company now sells fewer than one Avalon for every 10 Camrys.

Nissan considered dumping the Maxima several years ago, in light of surging sales for the Altima. But it decided the Maxima had too much name recognition to give up on it, and the redesign launched in mid-2015 has fared well, with sales jumping 55 percent last year and 2.5 percent in the first half of 2017. (The Maxima and the Chevy SS are the only full-size sedans to post increases this year.)

Nearly a quarter of full-size car owners who buy a new vehicle stay in the same segment, according to IHS Markit data. About a quarter buy a compact or midsize crossover, which is up from 19 percent three years ago.

The problem is that as many of those owners age, the segment isn't attracting many new buyers beyond police departments and car-rental companies.

"If you want more room, you're not looking for a car. You're looking for an SUV," Fisher said. "For the same price, same fuel economy and more utility, you could get yourself an SUV, and sometimes one with a third-row seat."

Few cars have enjoyed as much success as the Impala. Its collapse since the recession has been equally stunning, with 2017 marking the car's seventh consecutive year of declining sales.

Even in 2014, after it was last redesigned, the Impala dominated the large-car segment. But after its sales plummeted 45 percent in the first half of 2017, the Impala now trails the Dodge Charger and the Maxima.

It gets worse. Retail sales of the Impala have fallen 57 percent this year, to just 10,707 units in six months. Two-thirds of the Impalas sold in 2017 went to airport car-rental lots and other fleet operators.

Chevy has been less willing than most rivals to artificially boost Impala sales with discounts. Year to date, Impala incentives have averaged $4,800 per vehicle, vs. $5,600 for the Charger, $6,000 for the Maxima and $7,500 for the Chrysler 300, according to Autodata.

"By getting close to the true underlying demand, we've been able to optimize the revenue side of the equation," said Chevy spokesman Jim Cain.

But little underlying demand is left. The upside for Chevy is that killing the Impala probably wouldn't hurt the brand, particularly because it has also redesigned the Malibu and Cruze — incorporating many of the same attributes that made the Impala stand out in 2013.

IHS Markit data show that 61 percent of Impala owners remain loyal to Chevy with their next purchase, and 72 percent stay within the GM portfolio. Tom Libby, IHS Markit's manager of loyalty solutions and industry analysis, described those numbers as unusually high.

"It shows that the rest of their portfolio is more competitive," Libby said. "It speaks to the increasing appeal of the broader lineup within the brand."

Chevy officials declined to directly comment on the Impala's future. The car was expected to be freshened and get a new nine-speed transmission this year, but no such changes have been announced. The Automotive News Data Center estimates that GM built only about 12,600 Impalas in the first half of 2017, 77 percent fewer than the same period last year.

GM's president of North America, Alan Batey, said in a June interview that GM needs a balanced portfolio of products and that sales in other countries can help provide the scale needed to support less popular cars in the U.S. But the Impala is primarily a North American nameplate. Another strike against it is that it's built on GM's aging Epsilon platform, and the cost of migrating it to a new architecture would be increasingly hard to justify.

GM's newfound philosophy of focusing its investments on the parts of its business where it foresees worthwhile returns also doesn't bode well for the Impala. In addition to largely pulling out of Europe, India and other markets, GM has identified North American cars as an area in which it intends to cut back.

"We look at what is the portfolio customers are going to want in two, three, four, five years and beyond," GM CEO Mary Barra said in a November interview, "and make sure we're looking over the horizon to have the portfolio for the future — not just 'We've always had this, so we always will.'"