Since Ford made the infamous announcement that they were getting out of the “car” business, I have fielded an unending stream of questions from customers about the future of the automotive industry. Here is my opinion about the future of both Ford Motor Company and the traditional sedan.
The Facts: Sedan sales are on the decline
Here is a graph of car sales vs truck sales over the last few year. You can access the complete data from the Wall Street Journal here.
At Dovi Motors the models that Ford is getting rid of only account for about 10% of our sales, and some of those will transition into SUVs like the Ecosport and Escape next year. Ford’s plan is to come out with more SUVs in the future which should drive future growth.
The Facts: People want utility vehicle
Sport Utility Vehicles provide Utility! Do you have a big dog? No problem. We can fold down the back seats. Want to tow a small camper? An Escape can tow up to 2500lbs. Grand kids coming for the weekend? An SUV is safer and more spacious. Sport utilities are popular because they provide tons of benefits for the price, and customers have been flocking to showrooms for years to buy them. My dad has some old graphs from the 1980s and 90s that illustrate the rise of the SUV market and there is no doubt that consumers have settled on the SUV as the chassis of choice, especially in recent years.
The Facts: Fuel economy is a lower priority for consumers
The consumer climate has changed substantially over the last 8 years when it come to fuel economy. When Ford came out with the 2012 Fusion Hybrid, which achieved a 40 MPG rating, it was a huge deal. I have an old spread sheet I used when selling to illustrate the total cost of ownership of a CMax vs Fusion hybrid vs a Focus over time.
Cost of fuel almost never enters the discussion when selling vehicles today. Sometime I will make a statement like, “fuel will be a little cheaper with a sedan” when comparing an Escape to a Fusion, but that is the end of the discussion. Customers today are much more concerned about how a vehicle is going to make their life more enjoyable than how they can pinch a few pennies on better fuel economy. Here is an old ad we ran back in 2012. Notice the first three vehicles listed and the emphasis on fuel economy.
It is also worth mentioning that most of the vehicles today have much better economy than what was available 7 years ago. Anybody trading in a 2009 or 2010 vehicle is likely to get a fuel economy upgrade even if they do purchase an SUV!
Opinion: Welcome back the station wagon
All of these market realities have converged to usher back in the age of the station wagon. I remember back in the early 90s riding in the “way back” of our Mercury Sable wagon, staring out the back window. A few years ago, the most progressive luxury brand design concepts from Porsche, BMW, and Aston all looked more like space age station wagons that SUVs. Today these are vehicles dotting the road. Here is a shot of a black 2018 Porsche Cayenne from a car show we were at this summer. Check out more Upstate NY Car Club photos here.
This is the look of the future. Soon you will see all of the brands designing vehicles with an elongated silhouette that slopes off in the back. Ford made their statement about getting rid of cars because this is the look of the future. I imagine in 10 years seeing a traditional sedan on the road will be akin to seeing a minivan on the road today. Minivans are still driving around, but they look like something from the turn of the 21 century.
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