Best Used Mid Size Cars, Opinion: Four reasons Detroit should keep making sedans

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Best Used Mid Size Cars – Image via bmwclub.me

Best Used Mid Size Cars – Detroit Three has always had a tough time competing with Asian car makers in the market for midsize and compact sedans. Often the superior Japanese product design and the busy field by smaller competitors as well, make sedan arena the toughest competition in the industry. The margin is also thin.

The combination of these issues, improvements in vehicle design, reduces the gas-cost penalty of driving a sports-based sports car vehicle compared to a sedan, and lower gas prices – the national average price drops from $ 3.30 in 2008 to $ 2.25 in 2017 – causing the sedans’ share of overall vehicle sales to fall to 37% by 2017 from 47% a decade earlier. In June, the sedan accounted for only 31% of total vehicle sales.

Best Used Mid Size Cars

In 2011, automakers got paused on mileage standards – though the mile-per-gallon requirements increased, the Obama administration allowed automakers to meet separate standards based on platform platform size – the larger the four-wheel perimeter the lower the MPG Target.

As a result, the Detroit Three no longer needs to sell the sedan to reach EPA targets for the average fleet, and in early May, CEO Jim Hackett announced Ford F, + 0.40% will stop a row of all sedans that support SUVs and pickups – Chrysler and GM coming soon.

This decision may prove farsighted for four reasons.

Affordability and market share

The average vehicle price is around $ 36,000, and above $ 40,000 for Ford though it is sold, for now, a bargain of cheap sedans. With an average household income of about $ 60,000 per year, it is too expensive for at least a quarter of the family, and they should continue to buy older sedans or SUVs and trucks.

Despite the tough time selling sedans as well, foreign competitors continue to invest in cheaper vehicles, and not all canceled domestic brand sedans will be replaced by new sales of SUVs and Detroit light trucks. If Detroit remains on track, it will lose considerable market share for Japanese, Korean and German manufacturers and finally China as people on a limited budget looking for their sedans.

First buyer profits

Many young people enter the market to buy a sedan and if their experience is profitable, they buy up to SUVs and light trucks within the brand as their income and family grows. Canning Dodge Dart, Chevy Malibu and Ford Focus market to Toyota TM, + 0.85% and Honda HMC, + 1.13% guarantee fewer customers 10 years from now to Chrysler FCAU, + 0.96%, Ford and GM GM, + 2.12% SUV.

Look for Asians to increase SUV and crossover offerings and to gain market share even as they increase their sales faster through the sedan market.

The explosion of shale is not everything that becomes cracked

Investors are putting today’s stringent demands on shale manufacturers and although they respond to OPEC and Russia cut production, America remains a net petroleum importer and US gasoline consumption rises again. Add in the state entropy in Venezuela and US sanctions restrict Iranian exports when they become fully effective later this year, and gas prices could skyrocket to $ 3.50 a gallon.

That’s good news for the much-awaited plug-in hybrid and all the electric revolutions, but even the technology is more workable in lighter sedans than the heavier SUVs and pickups.

Gas, hybrid, or electric, sedans have lower oil price tags, and if oil prices soar, automakers without sedans may not be suitable as football equipment at the World Cup.

Supply chain flexibility

These days SUVs and medium-sized crossovers can be made on the same platform as the car but even though you’ve read about flexible manufacturing, launching a new sedan will take years after they leave from the Detroit ranks.

Shifting regulatory requirements and competition to incorporate newer technologies precludes only taking old vehicle designs off the shelf. It took years to get back to the sedan market with competitive products.

Essentially, Jim Hackett and his colleagues at GM and Chrysler are betting that the price of gasoline will permanently ease from recent highs of about $ 3.00 per gallon. To be disrespectful, they risked shareholders’ money with oil prices.

It is a preoccupation for people who are paid to build cars, not speculate.