Your Obsession With SUVs and Crossovers like the Ford Escape and Chevy Traverse Probably Just Led to 1,500 People Being Laid Off
Sedans are bearing the brunt of the growing popularity of crossovers and SUVsby Kirby Garlitos, on
The growing popularity of crossovers and SUVs has been a goldmine for a lot of automakers. As the demand for these cars grows, car companies are becoming more invested in building more of them. Unfortunately, there is a downside to the strong focus being put on crossovers and SUVs, and sedans are bearing the brunt of it. Sales of sedans have fallen off a cliff across the industry to the point that some automakers are taking drastic action to curb the increasingly worrisome trend. A good example is General Motors. The American automaker owns Chevrolet, and sales of the brand’s Cruze sedan is declining at an alarming rate. As such, the General has taken the difficult step of cutting the production of the Cruze by half, and in doing so, it could also cut as many as 1,500 jobs because of it.
The steady decline already prompted the General to scale back the production of the car at its Lordstown, Ohio facility to just two shifts
If you’ve been following the auto industry long enough, you know that the law of supply and demand hovers over it like a cloud. When interest in a specific segment increases, there’s another segment that’s going to be negatively affected by it. We’re seeing how that dynamic is playing out with the growing popularity of crossovers and SUVs and the dramatic decline in interest in sedans.
The Chevrolet Cruze is one of many sedans that are affected by it. Sales of the sedan have fallen dramatically in recent years, culminating in only 184,000 sold units in 2017, a 28 percent drop from sales numbers in 2016. The steady decline already prompted the General to scale back the production of the car at its Lordstown, Ohio facility to just two shifts compared to running it around at the clock in the past. Unfortunately, those measures still weren’t enough to stop the bleeding, forcing GM to take it a step further and slash as many as 1,500 jobs.
The production cutback is the latest sign that the market is increasingly shunning sedans in favor of utility vehicles
You could pin this decision on a number of factors, but it’s hard to go around the growing popularity of crossovers and SUVs is the biggest reason behind it. It’s not just that more and more customers are buying crossovers and SUVs, it’s that they’re sticking to the segment once they’ve gotten a piece of it. Data from auto consulting firm IHS Markit revealed that 66.9 percent of U.S. households with an SUV or crossover utility vehicle who returned to the market bought another utility vehicle, an all-time high mark.
"The broad range of utilities available, whether it be based on size, price or technology, now rivals the choice among sedans and continues to grow," IHS Markit’s Tom Libby said.
The production cutback is the latest sign that the market is increasingly shunning sedans in favor of utility vehicles. If this trend continues — and there’s no reason to believe it won’t — sedans, and the people who build them, could be put in an even more precarious position.
Read our full review on the 2018 Chevrolet Cruze.
Read our full review on the 2018 Ford Escape.
Read our full review on the 2018 Chevrolet Traverse.
Read more Chevrolet news.
Read more General Motors news.