The saloon car is dead. What happened?
The sports utility vehicle market exploded recently. All of a sudden, everyone wanted to drive around in vehicles resembling old Jeeps, but with all the mod-cons. Manufacturers quickly saw the opportunity, churning out dozens of models in the space of a few short years, trying to cash in on this emerging market trend. Vehicles got taller, larger, and more capable – reversing the trend towards small hatchbacks of the late 1990s.
Why this happened remains a bit of a mystery. Part of it undoubtedly had a lot do with pop culture. Arnold Schwarzeneggar famously bought a gas-guzzling Humvee to ferry him along Californian highways for no apparent reason in the mid-2000s. Other factors relate to general dissatisfaction with mainstream saloon cars and the need for more presence on the roads.
American manufacturers moved to kill the saloon car first. Dodge, for instance, ended its longstanding production of the Dart. Chrysler moved to kill the 200, with the CEO of both companies devising to focus more on Jeep SUVs – a significant departure from the firm’s traditional strategy.
When the brand first made the change, analysts thought it was going mad. But from today’s perspective, there’s good evidence that the shift saved both firms. The saloon market is effectively dead today. All the most profitable carmakers are building SUVs, pickups, or some combination of both, not traditional cars.
Ford’s announcement that it would be stopping the production of the Mondeo was perhaps the death knell for the saloon car market. The car, which was an evolution of the Cosworth, was one of the most popular vehicles globally. It allowed the average worker to own something akin to an executive car but at a much lower price point. From now onwards, the company says that it will be focusing exclusively on the F-150 pickup and other vehicles. The once-mainstream Mondeo is no more.
Even the Fusion is now at risk of being lost to the annals of time. Like so many other automakers, Ford has to restructure, owing to changing technology and consumer preferences. The small city car – once a staple of the industry – is losing ground to bigger and bigger vehicles. It is a trend that almost nobody predicted.
GM is also weighing whether it is worth investing in its Buicks, Chevys, and Cadillacs any more. Demand for these vehicles is falling through the floor, and it’s not just cyclical. Thanks to social media and other forces, people don’t want regular saloon cars anymore. They see them as dull. The only way forward for GM – from its perspective – is to invest in SUVs – a type of vehicle in which the firm has relatively limited experience.
Which saloons will survive?
The question now for many in the industry is, “which saloons will survive?” Some of the biggest names in the business will likely disappear. Large sedans, like the Ford Taurus, which cannibalize the SUV market are probably goners too. Similarly, any vehicle that doesn’t offer a size advantage versus larger SUVs (but that isn’t one) will likely fall out of company product portfolios. The market for these vehicles has all but disappeared.
Specialty and enthusiast sedans, however, are likely to persist. Dodge says that it expects to maintain the Challenger and Charger muscle car lines and wants to sell more units. These vehicles appeal to a very different market: people who love vehicles themselves, rather than what they can do with them.
Unlike practical saloons, nobody uses these cars to transport kids to school or go shopping. They’re for racing and showing off.
How much have saloon car sales collapsed?
The fall in the sale of saloon vehicles is far more dramatic than many people realize. The general public still has the idea in its head that sedans are the quintessential car and dominate the road. But the reality is the opposite. Between 2007, saloon and truck sales were level-pegging, with around 50 percent of the market each. But by 2020, car sales were just 30 percent of the market, with trucks pickup up more than 65 percent. By the end of 2022, some analysts think that sales of new cars could fall to as little as 25 percent of the total market, explaining why so many big manufacturers now want to exit the sector.
The collapse in sales is a reflection of changes in technology. The SUVs of old were giant, gas-guzzling monstrosities that stalked the streets like monsters. Their modern equivalents are very different in character, and far more socially acceptable. Gone are the vehicles that would struggle to do ten miles to the gallon. Plus, today’s versions look far less like they could drive over the top of other cars on the road, unlike the great hulks that once terrorized the streets.
The practicality issues
The fundamental driver of the decline in saloon sales is that they don’t offer the same level of practicality as trucks or vans. As https://www.swissvans.com/product-category/manufacturers/vw-vans/ points out, you can easily fit a family of nine in a camper van with plenty of space to play cards in the back. It’s a level of flexibility you just don’t get when you rely on a saloon.
Even on a basic level, though, the saloon car seems to offer less space than the hatchback – in many ways, the progenitor to the modern SUV. When you open the boot on a saloon, it comes separate from the rear window, meaning you never have as much space as you imagine. Sedans are larger than hatchbacks, but for no apparent reason, other than styling.
Fuel economy on modern SUVs is not nearly the trade-off it once was. Most manufacturers continued making their regular engines and then swapped out the old bodywork for new. Larger vehicles that sit taller on the road aren’t as aerodynamic. Still, the overall effect of this is relatively small for most users. Saloons will always be more energy-efficient, but the margin is nothing like it was when Jeep ruled the market.
Big money is now on trucks
SUVs aren’t just an interesting side-show for automakers. They’re their main business proposition. The term “car maker” almost seems like an anachronism in the present market. We should probably start calling them truck makers to reflect what they actually do more accurately.
The primary market for cars remains in China according to www.bloomberg.com. Several large western firms are moving their operations to this market to continue benefiting from their knowledge capital. Rules in China, plus a lack of exposure to SUVs, means that there’s a market for inexpensive, traditional city-going vehicles for the near future.
The dwindling car market elsewhere is a bit of a shock for an industry that expected a long ramp in sales at the start of the last decade. The message from industry bosses is clear: the entire structure of production is gearing towards making quality SUVs. Going back to the old model isn’t an option. Already billions have gone into this project, and it shows no sign of reversal any time soon.
2018 was very much the year the traditional car died. For the first time in history, the industry churned out more crossover models than it did standard vehicles, representing a sea-change in the sector. Interestingly, though, the evolution hasn’t really been picked up by the media. Focus remains on electrification and autonomy – two trends that may disrupt the auto industry even more than SUVs ever could. The shortage of cars could be the least of their worries. What happens when Tesla perfects its autonomous systems? We just don’t know.