Ford (F) took a step closer to abandoning sedans on Friday as the latest Fiesta rolled off an assembly line in Germany. But dark clouds on the economic horizon could lead consumers back to a passenger car market that automakers once considered to be on the way out. Ford stock lost ground on Monday. Carvana rebounded 9%.
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Car sales increase for Honda and Toyota
In the second quarter, car sales rose 46% to Honda (HMC) in the U.S. new-vehicle market, while truck sales rose 44%, the company said in a July 3 sales release.
The Accord and Civic pushed Honda passenger car sales above 33,000 in June and to more than 193,000 in the first half of the year, the statement said.
Year-to-date, Accord sales are up 24% and Civic sales are up 34%, helping Honda recover from a sharp drop in sales in 2022 due to supply disruptions.
“It’s exciting to see both our cars and light trucks doing so well,” Honda sales chief Mamadou Diallo said in the statement.
In the same way, Toyota engine (TMC) saw a surge in Camry sales in June and the first six months of 2023. Corolla sales increased in June, but have been declining year-to-date.
Ford and GM have stopped making sedans
Toyota and Honda still cater to the sedan market in America. Ford, General Engines (GM) and other automakers began exiting this market about five years ago as consumer tastes shifted toward larger crossovers, SUVs and pickup trucks.
Among the sedans that have taken the plunge: Ford’s Focus, Fiesta and Fusion, and GM’s Cruze.
The American auto giants have narrowed their sedan offerings to a few select models, like the Mustang and the Malibu. Ford stopped manufacturing the Fiesta domestically in 2022 and has now ended production of this once hugely popular subcompact car in Europe as well.
So why signs of recovery for sedans? Recent news from carvana (CVNA) may offer a clue.
Carvana’s best-selling cars
On July 5, Carvana announced its 10 best-selling vehicles for the first half of 2023. More than half of them were sedans.
The Honda Civic took the top spot, the used car online platform reported. The Nissan Altima, Toyota Corolla, Hyundai Elantra, Ford Mustang, Toyota Camry and Honda Accord are also in the top 10.
“Affordability and accessibility are critically important” to used car buyers, Carvana said in the statement.
This suggests inflation and recession-weary shoppers are looking for cheaper cars. And whether new or used, sedans tend to be among the cheapest options.
Ford Stock, Carvana Stock
In trading on Monday, Ford and Honda shares fell 0.3% and 1.1%, respectively. GM shares remained flat.
Toyota shares slipped 1%. The stock rallied as the company ramps up its electrification, trying to shake off its reputation as an electric vehicle laggard.
Carvana jumped 21% on Friday, then jumped another 9% early Monday. CVNA stock has soared 575% year-to-date as financials improve and stocks rebound from a 16-month slump.
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