Upcoming Midsize Sedans to Cannibalize Small-Car Market Share, Ford Analyst Predicts
Eric Merkle does not reveal to what degree he expects the middle-car segment to eat into small-car sales, but says midsize sedans are becoming as fuel-efficient as their smaller counterparts.
DEARBORN, MI – Ford anticipates the U.S. small-car segment to suffer when a slew of new midsize sedans begins arriving in volume next year, the auto maker’s top U.S. sales analyst says.
“We expect small-car sales will grow a bit, but they will be under some pressure, likely from the C/D segment,” Erich Merkle says during a media event here. “One reason is the cycle cadence with the midsize-sedan segment (is) unprecedented.”
Some of the pressure on small cars will come from Ford’s all-new ’13 Fusion arriving later this year. Other new entries coming this year and next include the ’13 Chevrolet Malibu, ’13 Honda Accord, ’13 Nissan Altima and ’14 Chevrolet Impala.
As a percentage of total U.S. light-vehicle sales, the middle-car segment has outperformed the small-car sector for the past decade, according to WardsAuto data.
In 2001, when fuel prices averaged $1.72 a gallon, small cars accounted for 14.3% of total light-vehicle sales, compared with 19.1% for midsize cars. Small-car deliveries did not eclipse 15.0% until 2008, when the average price of gasoline topped $4 a gallon. That same year, the middle-car segment hit 19.5%.
Through April of this year, the middle-car segment controlled 21.1% of the U.S. market, while small cars held 19.2%.
Midsize sedans are also becoming as fuel-efficient as their smaller counterparts, which could keep consumers from downsizing. “The differential between the fuel economy of small cars and midsize vehicles is going to close dramatically,” Merkle says. “We expect compact cars to remain relatively flat.”
For example, the ’13 Fusion equipped with the 1.6L turbocharged direct-injected EcoBoost 4-cyl. engine is expected to deliver 26/37 mpg (9.0-6.4 L/100 km) city/highway. In comparison, the smaller ’12 Focus with a 2.0L direct-injected 4-cyl. achieves 28/38 mpg (8.4-6.2 L/100 km) city/highway.
The ’13 Fusion Hybrid, with an all-new 2.0L Atkinson-cycle 4-cyl. mill, is expected to deliver 47/44 mpg (5.0-5.3 L/100 km) city/highway.
Price likely will play a role in determining how much market share the midsize-car segment ultimately takes from small cars as well.
Although pricing for the ’13 Fusion has yet to be announced, the new model is expected to be more expensive than the current-generation car, which begins at $20,705. A base-level ’12 Focus starts at $16,500.
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