It’s a common theme, a theme we’re hearing over and over: Canadians want SUVs and crossovers, not cars. Pickup trucks, too. But not cars.
The desire for a slightly higher ride height to aid ingress; available all-wheel drive; a flexible cargo area; and slightly rugged styling caused utility vehicles to outsell cars by a nearly 20-percent margin in 2016.
Not every car is affected by the downturn, however. Indeed, not even every car category is suffering.
Yet at the centre of the downturn sits a once mighty category that now holds little appeal to the retail customer, and even less appeal at the manufacturer’s suggested retail price.
Canadian sales of midsize cars have now declined in 20 of the last 24 months, year-over-year, including each of the last three. So far this year, while Canada’s auto industry reported 3-percent growth through two months and the passenger car sector fell 4 percent, midsize car volume is down 12 percent.
Even that sharp rate of decline masks an inherently worse situation. Fiat Chrysler Automobiles’ dealers are currently clearing out their remaining copies of the discontinued Chrysler 200, production of which ended late last year.
As a result, the 200, all too often rejected in the past, has seen a significant Canadian sales uptick in early 2017. Those sales don’t reflect true midsize demand. Subtract the 200 from the equation and Canadian sales of midsize cars are down 17 percent.
At the current pace, the Canadian auto industry will struggle to sell 80,000 midsize sedans in calendar year 2017 even as the overall industry’s results suggest a fifth consecutive record year for auto sales.
80,000? Even 85,000 sales for the midsize category would equal barely more than 4 percent of the overall Canadian new vehicle market, a stunning loss of share for a category that generated nearly 8 percent of the industry’s volume as recently as 2012. It’s a category that earned more than 130,000 sales as recently as 2013.
Yet almost without exception, midsize car sales are plunging in early 2017, just as they plunged in 2016. Through January and February, the nosedive affects virtually all corners of the intermediate sedanmarket: older models in need of a redesign, recently redesigned models, import brands and domestics, those with optional V6 engines and those without, those with all-wheel-drive availability and those without.
The Chevrolet Malibu, which earned critical praise after being hastily launched as an all-new model in 2016 following the letdown of the eighth-generation Malibu, has tumbled 30 percent so far this year.
The next midsize car to appear at dealers in all-new form, the Toyota Camry, is likewise down 30 percent. The 2018 Camry was revealed at the North American International Auto Show two months ago.
The Subaru Legacy, which comes equipped with all-wheel drive as standard equipment, is down 29 percent this year. The Volkswagen Passat, refreshed for 2016 but still suffering from the lack of a diesel engine and the accompanying scandal, is down 37 percent.
Ford’s broad Fusion range? Down 29 percent. The Honda Accord, which like the Camry should be revealed as an all-new model later this year, is down 18 percent. The Mazda 6, Nissan Altima, Buick Regal? All in decline.
Besides the Chrysler clear-out, only the Hyundai Sonata and Kia Optima, twin Korean-badged sedans, are on the upswing. Both of those upswings are manifested only because of the terrors of 2016. Forget that year-over-year comparison and look back two years. Compared with early 2015, Sonata sales are down 46 percent this year and Optima sales are down 14 percent. (Sonata sales fell to a seven-year low in 2016; the Optima tumbled to a five-year low.)
This rapid category-wide descent does not merely require automakers and dealers to reset their strategies, targeting budget-minded buyers with ever more spacious compact cars and family car buyers with Honda CR-Vs, Toyota RAV4s, Nissan Rogues, and Ford Escapes.
It will also likely cause further contraction in the segment. Already we’ve seen the disappearance of numerous midsize cars over the last decade: Dodge Avenger, Chrysler 200, Mitsubishi Galant, Pontiac G6, Saturn Aura, Suzuki Kizashi, plus the Chevrolet Epica, Suzuki Verona, and Mercury Milan.
New product from North America’s top midsize sellers – Toyota, Honda, Nissan – could spur activity in the segment. But with significant increases in fuel economy from comparatively priced crossovers, it’s more likely that we’re seeing a generational shift away from conventional family cars that can’t quickly be undone by global economic forces.
The car as we know it has overcome incursions in the past. It will do so again.