Americans bought more SUVs last year than cars and trucks combined. That’s been true for several years. The reasons are debatable and frequently debated, but the conclusion is so inescapable that several storied American car brands, including Ford and Buick, have dropped sedans from their lineups entirely.
But, industry journal Automotive News reports, something remarkable happened in the first quarter of 2023: Sales of sedans, coupes, hatchbacks, convertibles, and sports cars increased.
They’re nowhere near matching SUVs. But they are on the rise.
Cars “represented 21.4 percent of the 3.6 million new vehicles sold in the U.S. during the first quarter, according to the Automotive News Research & Data Center,” AN reports. “That’s up from the car’s quarterly nadir of 19.6 percent at the end of 2021.”
This May Be About Price
Industry insiders have many theories to explain the bump. The simplest, however, is that cars tend to be cheaper than SUVs.
Sometimes, cars and SUVs are built on the same platforms with largely the same parts. Even then, the SUV version tends to carry a higher price tag.
For instance, the 2023 Toyota Camry midsize sedan and Highlander midsize SUV are both built on a platform Toyota calls TNGA-K. The Camry starts at $26,220; the Highlander at $36,420.
The 2023 Honda Civic and CR-V are compact vehicles sharing the same platform and available with slightly modified versions of the same 1.5-liter turbocharged 4-cylinder engine. The Civic sedan starts at $26,450 with that turbocharged engine; the CR-V at $28,410.
As new car prices have soared to record highs over the past two years, some buyers may simply be opting for the cheaper vehicle built with the same stuff.
It May Be About Supply
Thin supplies of the most popular SUVs could also have pushed some buyers into cars instead. A Honda spokesperson told AN that low SUV inventories “could have caused some customers to migrate back to the Civic and Accord.”
A global microchip shortage in 2021 and 2022 left most automakers unable to build as many vehicles as demand would justify. Inventory is just starting to recover on many sales lots. Americans may have bought sedans because little else was available.
It May Be About Cool
Toyota Motor North America Senior Vice President Cooper Ericksen thinks the shift could be generational. “With every generation, there comes a different way of looking at the previous generation’s products,” he notes. “We’re seeing a little bit of that — there’s actually a much younger customer that is gravitating to sedans.”
Among younger people, SUVs may be so associated with climate change and conspicuous consumption that they’re in for a style shift. “If it’s mom’s car, does that make it cool for the next generation?” he asks.
The next generation may have some surprises in store for automakers. Several recent surveys have even suggested that young people are behind a resurgence of the stick shift.
There May Be a Natural Level
It’s also possible that a bump of 1.8% for one quarter is insignificant. Tyson Jominy, vice president of data and analytics at J.D. Power, told AN, “It seems like we’re approaching some kind of natural boundary, where SUVs are about 60 percent of the market, and pickups and vans and trucks are about 20 percent, and cars are about 20 percent.”
It May Not Matter for Long
The debate may be largely academic. Many of the new cars that manufacturers are excited about are electric vehicles (EVs). There may be a sort of convergent evolution between EVs and sedans. Slippery aerodynamics and light weight help maximize an EV’s range. Those are characteristics of cars, not SUVs.
In fact, some EVs manufacturers sell as SUVs are so car-like that the IRS briefly classified them as sedans earlier this year. An industry outcry forced the agency to reconsider because the vehicles qualify for EV tax subsidies only if they are considered SUVs.
