Why Americans No Longer Love Sedans (It’s not preference)

[Sulu]

The presenter argues that the reason that American automakers stopped producing sedans (like the Ford Fusion) is not because people were no longer buying sedans but because the automakers could not meet the Corporate Average Fuel Economy (CAFE) standards. The light truck CAFE standards (for crossover SUVs) are easier for the automakers to meet so they killed sedans, leaving only crossovers.

The automakers that were -- and are -- able to meet the high standards for sedans are ones like Toyota and Honda, long experts at building small, fuel efficient cars (sedans).

So the reason that so few sedans are now available in North America is that the American Three automakers artificially reduced the supply of vehicles available, not because there was no demand for sedans.

 

[carguy420]

I bet the profit margin of crossovers, SUVs and pick-up trucks also play a factor as well.

 

[Ian Schmidt]

I know BOF SUVs and pickups have both CAFE and profit margin advantages, but do sedan-based crossovers? I can't imagine there's a margin advantage, at the very least, since most of them are just tall sedans.

Early on a lot of people preferred the higher seating position and visibility of SUVs and the taller crossovers, and that's kind of become a self-fulfilling thing with the dominance of those segments. If you're in a sedan, good luck being able to see oncoming traffic to make a right turn if any kind of SUV/CUV is in the next lane over.

 

[CRSKTN]

I absolutely think this is plausible.
Also the "I need to be in an SUV so all these SUVs don't kill me in an accident" thinking that got set with early offerings is probably a big tailwind.
Higher prices means more financing margins too, better overall capital efficiencies.

 

[ssun30]

If (passenger) vehicle taxes are based on the fourth power law as they should be, the crossover/pickup problem would disappear overnight. A 3-ton battery electric SUV does 16 times the road damage of my 1.5-ton sedan, but their users don't pay 16 times the taxes for road maintenance, which is unfair. In most countries, preferences for vehicle types are entirely shaped by tax regulations.

 

[Sulu]

I know BOF SUVs and pickups have both CAFE and profit margin advantages, but do sedan-based crossovers? I can't imagine there's a margin advantage, at the very least, since most of them are just tall sedans.

Sedan-based crossovers are considered as light trucks in the USA, which gives them an advantage over real sedans.

If (passenger) vehicle taxes are based on the fourth power law as they should be, the crossover/pickup problem would disappear overnight. A 3-ton battery electric SUV does 16 times the road damage of my 1.5-ton sedan, but their users don't pay 16 times the taxes for road maintenance, which is unfair. In most countries, preferences for vehicle types are entirely shaped by tax regulations.

Agreed. North American jurisdictions -- states and provinces -- need to rethink their vehicle taxes. Depending upon gasoline taxes is not going to cut it anymore.


I am beginning to think that there is (much) more to this than just the American 3 not having fuel-efficient sedans available to sell. At the time, Ford had a good hybrid system, even plug-in hybrids. And GM and Ford had European subsidiaries producing more fuel efficient sedans that they could have adopted for sale in North America. I say the American 3 just gave up, since crossovers did not have to meet the same stringent requirements and they were more profitable.

 

[Levi]

If (passenger) vehicle taxes are based on the fourth power law as they should be, the crossover/pickup problem would disappear overnight. A 3-ton battery electric SUV does 16 times the road damage of my 1.5-ton sedan, but their users don't pay 16 times the taxes for road maintenance, which is unfair. In most countries, preferences for vehicle types are entirely shaped by tax regulations.

Cheap FWD crossovers are not really heavier than sedans. At least the kind that are sold in Europe.

 

[mikeavelli]

the fallacy is saying “americans”. This is a huge global trend not just here. Including Europe.

30 years ago a suburban was a POS and a clear truck with a cap. Today a Suburban drives nearly as good as a car with more features, power and luxury. Sedans never stood a chance. That is just one example.

Driving a RX 300 vs ES 300, the ES drove significantly better. Today a RX 500h destroys an ES pretty much in every facet.

I agree with the comments above and let me add that the companies improved the suvs greatly and the cars not so much.

 

[Ian Schmidt]

Yeah, the RX doesn't have to destroy the ES (and 20 years ago it didn't), but it feels like there's less effort on sedans industry-wide. I saw a new Camry PHEV up close the other day finally and it's quite nice, but it could be nicer.

 

[F1 Silver Arrows]

Yeah, the RX doesn't have to destroy the ES (and 20 years ago it didn't), but it feels like there's less effort on sedans industry-wide. I saw a new Camry PHEV up close the other day finally and it's quite nice, but it could be nicer.

🧐

A Camry PHEV?!

I kid, I know it was a typo. I would love a Camry PHEV though.

 

[Tragic Bronson]

🧐

A Camry PHEV?!

I kid, I know it was a typo. I would love a TRD Camry PHEV though.

FTFY

 

[mikeavelli]

I’ve been driving a TX 350 AWD and. Mazda CX-90 with the I-6 for the past few days and these things have gotten so good and are so much more useable than a sedan it saddens me. The sedan doesn’t stand a chance.

I plan to compare the two or at least talk about them separately.

 

[johifo]

The presenter argues that the reason that American automakers stopped producing sedans (like the Ford Fusion) is not because people were no longer buying sedans but because the automakers could not meet the Corporate Average Fuel Economy (CAFE) standards. The light truck CAFE standards (for crossover SUVs) are easier for the automakers to meet so they killed sedans, leaving only crossovers.

The automakers that were -- and are -- able to meet the high standards for sedans are ones like Toyota and Honda, long experts at building small, fuel efficient cars (sedans).

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The presenter makes a compelling point that American automakers' shift away from sedans was primarily driven by the difficulty in meeting the Corporate Average Fuel Economy (CAFE) standards. Since light trucks, such as crossover SUVs, were easier to produce in line with these standards, automakers opted to focus on them instead of sedans, despite continued consumer demand. On the other hand, companies like Toyota and Honda, with their expertise in producing small, fuel-efficient sedans, continued to meet the standards for these vehicles. Thus, the limited availability of sedans in North America was more of an industry choice than a response to market demand.