Table of Contents
Executive Summary
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- Top takeaways
- Market overview
- What’s next for the market?
- Impact of COVID-19 on the automotive industry
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- Figure 1: Short-, medium- and long-term impact of COVID-19 on sedans and heavy passenger vehicles, November 2020
- Opportunities and challenges
- COVID-19 can lead to more multi-car households in the future
- COVID-19 incentives help with affordability, but not entirely
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- Figure 2: Attitude toward COVID-19 incentives, September 2020
- Lifestyle drives loyalty to vehicle type
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- Figure 3: Perception of how vehicles fit within consumers lifestyles, September 2020
- OEMs can market their vehicles as lifestyle accessories
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- Figure 4: Reasons for not considering a heavy passenger vehicle, September 2020
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- Figure 5: Reasons for not considering a light passenger vehicle, September 2020
The Market – Key Takeaways
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- SUVs will recover quickly; sedan recovery will lag
- More US households could become two-car homes
- Consumers have maintained their long-term purchase intent
Market Size and Forecast
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- Overall, the general market is paced to recover in longer term
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- Figure 6: Total US unit sales and forecast of new sedans and heavy passenger vehicles, at current prices, 2015-25
- Impact of COVID-19 on sedans and heavy passenger vehicles
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- Figure 7: Short-, medium- and long-term impact of COVID-19 on sedans, November 2020
- Lockdown
- Reemergence
- Recovery
- COVID-19: US context
- Learnings from the last recession
- OEMs repeat history and scale back on sedans during economic crisis
Segment Performance
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- Fewer options breed poor sedan sales beyond 2020 and the pandemic
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- Figure 8: Total US unit sales and forecast of new light passenger vehicles, at current prices, 2015-25
- Heavy passenger vehicles will recover sooner than sedans
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- Figure 9: Total US unit sales and forecast of new heavy passenger vehicles, at current prices, 2015-25
Market Factors
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- Auto sales give an assist to a re-emerging (but still down) GDP
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- Figure 10: GDP change from previous period, Q1 2007-Q2 2020
- High unemployment and low consumer confidence correlate to low vehicle sales
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- Figure 11: Consumer confidence and unemployment, 2000-October 2020
- Low driving volumes have contributed to low car sales
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- Figure 12: Frequency of driving since the start of the pandemic, September 2020
- Longer-term purchase intent remains unchanged
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- Figure 13: Purchase intent, September 2020
Market Opportunities
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- More US households could become multi-car homes
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- Figure 14: Number of vehicles in household, September 2020
- COVID-19 incentives try to tackle vehicle affordability
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- Figure 15: Attitude toward COVID-19 incentives, September 2020
- Larger vehicles can be leveraged as the “safer” vehicle purchase
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- Figure 16: Perception of safety toward larger cars, September 2020
Companies and Brands – Key Takeaways
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- Kia is intent on keeping sedans
- Tesla’s Cybertruck redesign is the pinnacle of understanding consumer needs
Competitive Strategies
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- Kia continues to bet on sedans
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- Figure 17: Kia K5 sedan social video
- Automakers compete for the EV pickup market
- Tesla Cybertruck
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- Figure 18: Tesla Cybertruck
- Ford EV F-150
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- Figure 19: Ford EV F-150
- Rivian R1T
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- Figure 20: Rivian R1T
- GM cuts 10 sedans in five years
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- Figure 21: General Motors focuses on electric vehicles
The Consumer – Key Takeaways
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- Sedans are the most-owned vehicle
- Female consumers drive SUV popularity
- Power and performance attract heavy passenger consumers
- Light passenger vehicle consumers seek stylish cars
- Lifestyle needs dictate vehicle segment preference
Consumer Trend Drivers Impacting Sedans and Heavy Passenger Vehicles
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- Value
- Technology
- Identity
Vehicle Ownership by Type
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- Sedans are the most owned vehicle
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- Figure 22: Vehicle types in household, September 2020
- SUVs are a girl’s best friend; gentlemen prefer sedans
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- Figure 23: Vehicle types in household, by gender, September 2020
- Changes in lifestyles can prompt a switch in segments
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- Figure 24: Vehicle types in household, by age, September 2020
- Higher-income households more likely to own SUVs
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- Figure 25: Vehicle types in household, by household income, September 2020
Vehicle Purchase Consideration by Type
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- SUVs and Sedans reign supreme; pickups are still a niche
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- Figure 26: Vehicle types considered, September 2020
- Consumers are loyal to their vehicle type
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- Figure 27: Vehicle types considered, by current type ownership, September 2020
- Women drive SUV popularity
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- Figure 28: Vehicle types considered, by gender, September 2020
Preferred Heavy Passenger Vehicle Features
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- All-wheel drive attracts car buyers to the segment
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- Figure 29: Vehicle types considered, September 2020
- Parents prefer vehicles with third row seating
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- Figure 30: Vehicle types considered, by parental status, September 2020
Reasons for Light Passenger Vehicle Consideration
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- Style matters most to light passenger vehicle owners
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- Figure 31: Reasons for considering a light passenger vehicle, September 2020
- Smaller cars are bastions of affordability
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- Figure 32: Perception of affordability, September 2020
- Small passenger vehicles perceived as being more fun
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- Figure 33: Perception of light passenger vehicles as more fun to drive, September 2020
Barriers to Segment Entry
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- Style and size matter to car buyers
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- Figure 34: Reasons for not considering a heavy passenger vehicle, September 2020
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- Figure 35: Reasons for not considering a light passenger vehicle, September 2020
- Vehicle segment and lifestyle needs go hand in hand
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- Figure 36: Consumer attitudes toward other vehicle segments, September 2020
- Large vehicle affordability plagues pretty much everyone
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- Figure 37: Heavy passenger vehicle affordability, September 2020
- No new friends: consumers aren’t interested in other vehicle types
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- Figure 38: Likelihood of repurchasing same vehicle type, September 2020
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Forecast
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
Appendix – The Consumer
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- Figure 39: Desired vehicle features, by current SUV owners, September 2020
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