As Americans emerge from the recession, they are buying much different vehicles than they did before the crash — smaller and more fuel-efficient — signifying a major shift. Compared with consumers in the first half of 2007, Americans now are buying more cars, fewer trucks and smaller vehicles in general; smaller and less expensive cars within segments; and ordinary rides that replace bigger or more luxurious vehicles. Still, as they go down in size, buyers aren't necessarily sacrificing equipment.
"We've got people trading Lexuses for Camrys," said Ernie Sims, executive vice president of Al Hendrickson Toyota in Coconut Creek, Fla. "Buyers are much more cautious, more rational."
Cars are outselling light trucks again, taking 53.4% of the market in the first half. That compares with 49.2% in the first half of 2007. But a close look at the numbers reveals an even more dramatic shift.
When car-based crossovers and minivans are lumped in with cars rather than with trucks, the swing away from body-on-frame pickups, SUVs and full-sized vans is striking. The big trucks plunged from 31.1% of the U.S. market in the first half of 2007 to 22.8% in the first half of 2010. Car-based vehicles grew to 77.2%t, from 68.9% in the same period.
SUVs have fallen more than any other segment during the three year-span: to 7.9%, from 12.8%. The car-based crossovers that look like SUVs but handle better and get better mileage have grown by 5.2 share points — 19.6% in 2010, from 14.4% in 2007.
"When gas prices spiked [in 2008] and manufacturers dropped big incentives on high-end trucks, consumers felt burned and SUVs got hit real hard," said George Magliano, a forecaster for IHS Automotive. "Manufacturers shifted from SUVs to crossovers."
Within segments, buyers are moving to less premium nameplates.
For example, upscale cars held their 6.4% share overall over the three-year stretch. But demand has shifted some from larger vehicles, such as the BMW 7 and 5 series and Mercedes S and E class, toward the likes of the Mercedes C class.
Similarly, sporty cars stayed at 3.0% of the overall market. But lower-tier sporty models such as the Ford Mustang and Chevrolet Camaro have gained a half point, while the group of pricier sports car nameplates, including the Chevrolet Corvette and BMW Z4, went from 0.6% to 0.2%.
The growth in car sales is all at the lower end. The small-car category that includes the Toyota Corolla and Ford Focus commanded 13.8% of the U.S. market in the first half of 2010, up from 12% in the first half of 2007. Mid-sized cars, led by the Honda Accord, Toyota Camry and Ford Fusion, held 30.3% of the market, compared with 27.9% in 2007.
Even within the mid-sized car segment, consumers are shifting down. The pricier end of the category, which includes the Chrysler 300 and Nissan Maxima, has lost share since 2007, while the gains were concentrated among less expensive models such as the Hyundai Sonata and Nissan Altima.
But consumers are not necessarily choosing cheaper vehicles. Transaction prices are rising. Equipment levels and technology content are higher in even the smallest models, manufacturers say.
"When consumers downsize, they don't leave behind the options, content and features they had," said George Pipas, chief sales analyst for Ford Motor Co.
"Now our Fiesta, Focus and Fusion have options like Sync that weren't available on smaller vehicles three years ago." Ford customers are buying greater proportions of upper-end trim levels and technology features, boosting per-vehicle revenue, he said.
IHS Automotive's Magliano thinks most of the changes are permanent.
"We're moving into an era of less ostentatious buying habits," Magliano said. "Some of these segments are never coming back, either because consumers have irrevocably moved away or the manufacturer has pulled the product."