One reason why this post was published Wednesday instead of earlier in the week is that I was at a Chicago-area event where Honda PR was presenting the all-new Accord to local media.
This particular presentation was unusual in that Honda focused less on the new car’s specs and features and more on a major question that’s hovering over the midsize-sedan class – namely, will the segment even exist in a few years? Or will crossovers (CUVs) have fully taken over by then?
It’s an important question for Honda (and any automaker, really), and it’s obvious that reporters are asking why Honda would spend resources on redesigning a midsize sedan when the crossover market is so damn hot.
Honda, of course, pushed back by reminding assembled media that we’re talking Accord here, and it’s one of the best-selling cars of all-time, one of the most well-known nameplates, a bread-and-butter car for the brand, one the most heavily awarded cars of all time, et cetera. So why wouldn’t the brand stay with a car that does such volume, even if the rest of the segment is seeing a decline?
The company has a point – it never occurred to me that Honda would give up on Accord (or Toyota give up on Camry) despite the shift in market trends. Those two models are just too damn popular.
It was a different point of pushback that caught my ear. The company spokesman giving the presentation politely suggested that journalists are buying into the midsize deathwatch narrative a little too easily, because it’s easy to see a near 20-percent decline and say, “Well that’s it, the trend will continue and the segment will die.” Never mind that the trend could stop or even reverse in future years.
What’s interesting is looking at what cars have left the midsize segment in the past couple of years – or are about to. It’s a small number. Mitsubishi no longer has an offering there because the company is barely alive in the North American market. Volkswagen is planning the CC’s death, but a replacement is on the way. And while focusing on trucks and SUVs was part of the reasoning behind FCA’s choice to kill the Chrysler 200 and Dodge Avenger, it’s only one reason why those two cars are dead and soon to be dead.
Those two models were killed in part because they failed to compete at a high-enough level to justify investment, and FCA felt it better to focus in the short term on building models that sell. The company’s struggles dictated this – FCA simply had to concentrate its efforts on its best-sellers in ways other OEMs haven’t had to. The 200 also lacked rear headroom – a fatal flaw in this class – and it’s possible Sergio Marchionne wanted to pare the lineup down in order to merge with another automaker.
Automakers aren’t yet fleeing the midsize segment, then. Both the Camry and Accord are fully redesigned for this year and Nissan’s Altima is expected to follow suit in short order. Other vehicles in the segment have been recently refreshed.
Yet just about every journalist, pundit and analyst has predicted the death of the midsize sedan (we haven’t, exactly. As we state in our Midsize Sedan Deathwatch pieces: “The midsize sedan as we know it — “midsizedus sedanicus” in the original Latin — isn’t going anywhere any time soon, but the ongoing sales contraction will result in a reduction of mainstream intermediate sedans in the U.S. market. How do we know? It already has.”)
However, I think it’s important to note that “decline” does not equal “death.”
What I mean by that is while the segment is likely to see fewer sales unless consumer tastes shift back (keep an eye on gas prices, and yes, I know crossovers are much more fuel-efficient than before), and while a model or two may disappear, the segment isn’t likely to.
What’s more likely, in my view, is that midsize segment will simply no longer be the dominant class.
It’s human nature to overreact to trends. Think about the aging athlete who has a bad year and is assumed to be too old to be any good anymore. Sometimes, that’s the case, but sometimes it’s just an off year and her or she bounces right back the next season. Other times he or she is no longer dominant but still can perform at a high level. Either way, a decline doesn’t always signify the end.
That’s what I think will happen to the midsize segment. The rumors of its death have been exaggerated.
Still, there is concern outside of what we called the “big three” – Accord, Camry and Nissan Altima. As Tim noted before, the non-big-three midsizers are suffering.
While I won’t be saying prayers for the Malibu or Fusion anytime soon, that news could be worrisome for Subaru Legacy and Mazda 6 fans. The good news is that the Legacy was just refreshed, and since it shares architecture with the Outback, it’s likely safe for now.
As for the 6, Mazda already told us they had no intent, for now, of killing it. But as Tim noted in that piece, it’s not just about sales numbers but about profit. On the other hand, the 6’s driving dynamics live up to Mazda’s chosen “zoom zoom” identity, and the company could keep the 6 around just for that reason, even if the profit equation isn’t so favorable.
It’s clear that for Honda, Toyota and Nissan, everything is still relatively rosy in the midsize segment. But with 35 percent fewer nameplates in the class than there were a decade ago, and with almost 20 percent of CUV conquests coming from the midsize class, things do look a little dire.
Dire doesn’t mean dead, though. The midsize segment isn’t going anywhere, nor is the Accord. Adjust expectations accordingly, but don’t start the funeral dirge just yet.