Resurgence of the American Car

Manufacturers redouble efforts in face of SUV domination

Will 2019 go down as the final hurrah, or when the tide turned for the American Car? A rising tide has lifted most all boats in the SUV/CUV ocean. The manufacturers enjoy the ease with which they can print money, for the most part. Traditional car companies, once dosed with a recipe rich in higher hip points, and one of the multitude of more than two wheel drive systems, see their bottom lines shored up. In the unsure future bets for some form of electrification of drivetrains, the next safest option is to dance with what brought ya… the traditional American sedan. 

It’s a far safer and historically sound gambit to re-gird the systems that are already in place, and are still seeing cycle after cycle improvements in all areas, such as fuel economy, safety, and yeah, even utility that is better than some ‘cramped’ CUVs. Car companies know how to make sedans. And as can be learned from specialty makers such as Porsche, the SUVs, once established can be used to channel support for improvements in other lines. It’s also a safe hedge against the unknown oil price futures. 

All the oxygen has not been sucked out of the room on car sales. Traditional car sales have fallen, and in some areas dramatically, but they are not dead yet. And many people’s futures and livelihoods will be served by continuing to offer strong product in the sweet spot midsized sedan market. To do this, logic says that the mode most see is to focus on the one or two main segments. Reduce variants, and badge engineered copies. Pump out mainstream volume of desirability even if it’s just for good ol’ commuting or ride-share duties. Those are still needed, and still drive a lot of business. 

Nissan is making a grand play on this with the new 2020 Versa. They, more than many, are really pumping the cars with more efforts. The Versa will take its previously budget appearance and make a strong leap into very well tied-together overall styling and packaging. The goal here is the sparse offerings to the recent 20 somethings to be able to afford a car that has the complete package. Stay tuned to see if the forthcoming price announcement will hit its target.

Nissan also recently touted a study that shows the interest in cars is not dead, too. I won’t go into details of the surveys here, but suffice it to say there appears to be no gap in interest in considering a sedan equally to an SUV, nor is there any statistical significance that SUV owners are any more satisfied with their ownership over those for sedan owners. What that tells me is it’s all in product allure and pricing strategies. And evidence says that new designs are set to be very alluring. 

The attack vector for coupes, sports sedans and many performance models is a bit different. Those lines are there for halo, engineering exercises, or pure sentimentality. The risk is all compounded by the various side bets being placed on again the alternate technologies of electrification and the cherry on top being that of autonomous drive capabilities. Again, like in the stock market, the mutual funds are supported by the index funds of solid car offerings. If the efforts in niche segments can be directly put into use on the core models, then it can be worth it. 

While Nissan’s focus is gusseting the middle, Hyundai’s vector is more in a line. They are working the overall plan to improve their engineering and performance of otherwise juicy center offerings in place now. Their resurgence into design has happened. That story has been told. Almost old hat. Hyundai designs went from econobox and staid, to very striking in a matter of essentially one cycle. 

Hyundai’s top ‘car guy’, Mike O’Brien can’t stop talking about their plans. Mike is the quintessential evangelist for the brand. I learned this first hand. When at a recent track event, held to demonstrate the edge of performance gains that has been made on the Veloster N, I was one of the first in line to find the chinks in their armor. Being that one dons a safety helmet for such track excursions done in the name of journalism, a funny thing happened to me. I was unaware that my ride-along on-track was none other than same VP O’Brien. I simultaneously focused on the track, the manual shifting and how the car put down the power in the wet, all while getting the focused narrative from Mr. O’Brien of the efforts Hyundai has put into each of the things that made my lap possible. Again, he is the champion of their cars. Great passion and it shows. Bottom line is the Veloster N is yet another example that if the 20 somethings get the opportunity to appraise it or similar strong offerings, the survey says they will have no hesitation to consider it. They’d just have to deal with that new thing on their face… the smile, that the SUV never gave them.

Last year witnessed the new Accord and Camry. Again, two models that literally need no introduction for strong North American sales. Production numbers that no one can ignore. And far from dying, though a market correction has occurred to be sure. That was the start of the shoring up of the American car market. We will be seeing refreshes of core models over the coming months that will offer the best value proposition in a long time, with strong, fresh designs necessary to stem the tide of SUVs. Prior to this, the effort had been gutted by the rush to move resources to the other emerging markets (AVs and BEVs), and since that will be a long, and somewhat unsure game, this cycle of cars is starting out to be the best resurgence of car, once again. Time will tell if another cycle is needed, but the resources put on making these new cars are giving us some of the best offerings in a long time.