On Thursday morning, GM Chief Financial Officer Chuck Stevens told reporters that the company will “make significantly lower investments on a go-forward basis” in its passenger car lineup. “We are focusing on the right mix of products,” added CEO Mary Barra, during a conference call with analysts and media to discuss GM’s first-quarter earnings.
The biggest of the domestic manufacturers recently trimmed production at the Lordstown, Ohio, plant producing its once-popular Chevrolet Cruze model, even as it announced the addition of a shift at the Spring Hill factory in Tennessee that makes its hot-selling GMC Acadia and Cadillac XT5 crossovers. GM’s Cadillac brand alone will add at least three more utility vehicles, including the XT4 just unveiled at the New York Auto Show. But the Chevrolet brand, for one, is dropping its Sonic hatchback and reviewing the fate of a number of passenger car models, such as its big Impala.
Across town, Fiat Chrysler Automobiles has already abandoned its Dodge Dart and Chrysler 200 sedans. The Euro-American automaker retains just three passenger car models: the Chrysler 300, a full-size sedan, and the Dodge Challenger and Charger muscle cars that compete with the Ford Mustang. All three are produced in Canada. FCA builds no passenger cars in the U.S., converting several factories to build new pickups and SUVs over the last several years.
The surge in SUV and pickup demand has hit import brands particularly hard, especially Japanese makers who long have dominated in sedan and coupe sales. Toyota has had to increase imports of its RAV4 model from Japan to keep up. Its high-line Lexus brand has launched a wave of new crossover offerings over the last several years, including the small UX, the compact NX and a stretched, three-row version of its segment-leading RX.
“We’re acutely aware there’s a robust SUV market in the U.S., and Lexus is playing a part in that,” said Cooper Ericksen, the brand’s U.S. marketing chief. “We understand the importance of SUVs, but we also understand the importance of great sedans."
Will the industry shift back?
Across the industry, automakers are expected to continue trimming back on their sedans, coupes and other passenger car models, shifting more and more resources to their light trucks. But how far that move will go remains a matter of debate.
Among other things, some manufacturers say they’re hedging bets in case the market shifts again, especially in the event of a major surge in energy prices. But today’s light trucks are more fuel efficient than ever. The new diesel version of the Ford F-150 pickup is expected to get at least 30 mpg. And new hybrids and even all-electric SUVs could take fuel prices out of the equation entirely.
The sedan is far from dead — but it is becoming less and less relevant to American motorists.