Small Sedans Disappear from North American Market Amid SUV Popularity Surge

[Asia Economy Reporter Suyeon Woo] As the popularity of sport utility vehicles (SUVs) rises globally, major global automakers have recently announced their withdrawal from the North American subcompact sedan market one after another. This trend is also reflected domestically, putting the domestic subcompact sedan market at risk of virtually disappearing.

According to the automotive industry on the 30th, last year the U.S. subcompact car (including hatchbacks) market was around 340,000 units, a sharp decline of about 42% compared to 600,000 units in 2015. On the other hand, the U.S. subcompact SUV market grew to 780,000 units last year, tripling from 280,000 units in 2015.

The number of models also changed: general subcompact cars decreased from 13 models in 2015 to 9 in 2019, while subcompact SUVs, which were only 7 models until 2015, increased to 23 models last year. The sluggishness of subcompact sedans is due to the launch of many new SUVs with superior space utilization and the continuous decline in oil prices, which relatively weakened the fuel efficiency competitiveness of subcompact sedans.

Accordingly, global automakers such as Toyota, GM, and Ford have recently announced the suspension of production and sales of subcompact sedans in the North American market. Toyota stopped production of the Yaris, which was contract-produced at Mazda's Mexico plant, from June and decided to stop sales once inventory is depleted. GM announced the end of production for the Chevrolet Sonic in October, and Ford discontinued the Fiesta last year.

Hyundai Motor Company Compact Sedan Accent

Toyota Compact Sedan Yaris

Hyundai Motor Company also decided to withdraw the subcompact sedan Accent from Canada, a major market in the North American region, by the end of this year. The Accent, first launched in Canada in 1994, was a popular model that held the number one position in its segment from 2009 to 2017. However, with the introduction of the subcompact SUV Kona in 2018, popularity shifted, leading to its discontinuation.

Demand for the subcompact sedan Accent is also rapidly declining in the U.S. mainland market. Among the 11 Hyundai models sold in the U.S. up to July this year, the Accent (9,832 units) showed the largest decrease with a 42% drop compared to the previous year. The entry SUV Venue, launched in the U.S. market this year, sold 8,791 units, absorbing the demand lost from the decline in subcompact sedans.

The contraction of the subcompact sedan market is similar domestically. Last year, with the launch of key new models such as Hyundai Venue and Kia Seltos, competition in the small (A and B) segments intensified, and the position of subcompact sedans gradually narrowed. Only Renault Samsung Motors' hatchback Clio maintains a presence.

Hyundai stopped domestic production of the Accent in September last year, and Kia produces over 50,000 units annually of the Pride (Rio) domestically, but all are for export, with domestic sales virtually at 'zero (0)'.