Is there Still Space in the Market for Sedans?

April 17th, 2022

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Like a slow motion replay, the scene has been unfolding for some time. In fact, go back a couple of years and the writing was on the wall. Australians are obsessed with SUVs. But it’s not just here either, with many other countries following the trend, none more evident than the United States and China.

It has reached the point now where local SUV sales are far and away outperforming sedans, and have blown past 50% of all new car sales. On the one hand, the rise of commercial vehicles like utes has also helped to skew the numbers away from sedans, but the prominence of the SUV category is no statistical anomaly.

With such an evident trend appearing to be set in stone, it does raise questions over the future viability of the sedan format. In particular, will sedans still have a place in the market as SUV sales soar?

An evolving landscape

Cars have always been redefined by the technological progress that accompanies them. That doesn’t just extend to what’s under the bonnet either, nor what’s inside the cabin. It also extends to the shape of the body. We’ve seen an evolution as far as new formats like crossovers, liftbacks and many other identities.

In many respects, there is no reason to believe this won’t continue as means to continue fuelling the sedan market. Design changes may be subtle, but incorporating the feedback we’ve come to expect from those who prefer things like superior room, ride height, visibility and off-road versatility that comes with an SUV. Not to mention, with electrification and autonomy on the way, designs will inherently continue to transform, gradually shifting our taste in vehicles too.

The value proposition will dictate future sales

For now, sedans are still posting sales numbers that are nothing to sneeze at. Sure, they may be declining, but the choice for SUV models has risen astronomically to provide more options than ever before. Motorists’ preferences may have changed but in some ways, historical data may have been otherwise pointed to higher levels of SUV sales – and lower sedan sales – had drivers been afforded more choice at an earlier stage.

It is also a challenge that manufacturers should embrace. They will not only be faced with the task of streamlining their sedan range – as many have done already – but also going about reinvigorating a value proposition into the category to drive sales.

SUV sales may offer auto-makers fatter margins, however their higher prices and at-times polarising looks will still be a barrier to pushing sedans out of the market. So if sedans are then here to stay, car manufacturers must add value in the form of new technology, amenity, efficiency and performance to compete for the shrinking pool of buyers. And it’s many of these criteria that sedans have historically held the upper hand.