The recovery of Detroit’s automakers is about to face its stiffest challenge yet on an unlikely battlefield: The sizzling market for midsize family sedans, as General Motors (GM) and Ford square off against Japanese, South Korean and German rivals.
This fall, consumers have the chance to kick the tires on the redesigned 2013 Ford Fusion and GM’s Chevrolet Malibu.
However, the two vehicles face an uphill fight against the three market leaders — the Toyota Camry, Honda Accord and Nissan Altima — all of which are new or recently redesigned. Add in the latest offerings of the Hyundai Sonata , Volkswagen Passat and Chrysler’s existing 200 and Dodge Avenger cars, and the market is as crowded as it has ever been.
The US automakers have consistently fallen short in this sector for nearly two decades, trailing Toyota and Honda since the mid-1990s, but it is now essential that they recover some of that lost share as the segment is becoming more important.
Sales of midsize family cars are up 23 percent in the first eight months of the year versus 15 percent for the whole industry — partly a reflection of newer, edgier designs with better fuel economy, more premium features and fresh technology.
A lot is at stake. Detroit’s Big Three may have recovered since the financial crisis thanks to government bailouts and generous loans, but they are still struggling to find a path to sustainable growth.
“Now it’s absolutely critical” for Detroit to be successful in the midsize segment, Goldman Sachs auto analyst Patrick Archambault said. “If you don’t have a viable product in that segment, you’re screwed in the longer term.”
Their recent record has been mixed. GM and Chrysler have returned from near-death to profitability, and Ford has resumed paying dividends.
“Everyone has upped their game” in midsize family sedans, said Jim Farley, a former Toyota sales executive who is now Ford’s global marketing chief.
Farley said the Detroit brands “are more competitive than they have been” in midsize cars, “but so is everyone.”
Detroit has a chance to regain some lost ground, but the competition has become much more ferocious, said Michael Robinet, managing director of IHS Automotive Consulting in Novi, Michigan.
“The companies with the most at stake are the Japanese,” Robinet said.
He added that the US, German and South Korean brands “all are raising their game substantially in this segment,” while traditional midsize stalwarts Toyota and Honda “have the most to lose and the most to defend.”
The best US hope may be the 2013 Ford Fusion, which will reach showrooms in the middle of next month.
Models like the Fusion “have significantly narrowed the gap” with the best Japanese-branded midsize cars for performance, features, quality and appeal, said Jeff Schuster, senior vice president of LMC Automotive in Troy, Michigan.
It is a radical departure from previous models, inspired by the smaller European-designed Fiesta and Focus. The new Fusion will share its basic underpinnings and much of its crisply styled sheet metal with the new European Mondeo, which debuts later this month at the Paris Auto Show.
The Fusion will sport advanced technology, from Ford’s acclaimed Ecoboost turbocharged direct-injection engine to the much-maligned MyFord Touch infotainment system. The Fusion Hybrid will also deliver up to 20km per liter.