Automotive News' annual deep dive into the industry's vehicle plans over the next few years, the Future Product Pipeline series, shows an accelerating trend: the culling of car models and variants from automakers' U.S. lineups as brands simplify their offerings in a bid to improve efficiency while attempting to satiate consumers' myriad tastes.
In recent weeks, we've seen the following examples:
- Honda is discontinuing the Fit subcompact, Civic coupe and manual-transmission Accord cars; Toyota is pulling the Yaris subcompact sedan and hatchback out of this market.
- And as we reported last week, Mercedes-Benz — which has a lineup as large and varied as any automotive brand — plans to cut seven coupe and convertible variants.
Consumer tastes change, certainly, as do the economics of a business with high upfront capital requirements for development, certification and production. Just as in nature, when automakers cull the weakest among the herd, the result is usually a stronger herd. With COVID-19 putting additional financial pressure on automakers and retailers that were already wrestling with striking the right balance among demand, inventories, pricing and incentives, slimming the car lineup is a logical step. No dealer wants to be saddled with some low-volume coupe variant that's collecting cobwebs on the lot when American consumers have a voracious appetite for crossovers and SUVs.
The culling within German luxury brands is warranted. Their diverse product offerings in North America are largely an unintended side effect of consumer desires here to buy off the lot instead of ordering, as happens in Europe. Dealers may feel compelled here to stock multiple configurations of the same coupe, for example, when one or two would suffice.
But the strategy is more dangerous when it comes to mass-market brands eliminating their least-expensive models.
Subcompact car sales have taken it on the chin as an attractive variety of practical subcompact and compact crossovers entered the market. But the axing of subcompact cars also raises the entry point for each brand by several thousand dollars, a move that will keep some first-time buyers off the new-vehicle lot and limit the opportunity to build a lifetime of brand loyalty. That is a dangerous game, indeed.