American Car Buyers Rediscover Sedans, Small SUVs as Gas Prices Bite

Dow Jones
3 hours ago

American car buyers are rediscovering smaller vehicles.

General Motors posted a big rise in sales of its small SUVs in the third quarter, including the Chevrolet Trax and Trailblazer. Sales of the Hyundai Elantra sedan jumped 18%. Toyota Motor's small Corolla is sharply up this year. All carry sticker prices starting below $25,000. Meanwhile, sales of some big SUVs struggled. GM recorded declines in hulking SUVs like the Chevrolet Suburban and Tahoe. Hyundai's three-row Palisade SUV dropped 1% in the third quarter. Jeep's Grand Cherokee declined by 30%.

"Thank God we never gave up on passenger cars because that's helping us gain a little bit of share in the marketplace," said Randy Parker, chief executive of Hyundai Motor America, at an Automotive News event in Detroit on Wednesday.

Overall, U.S. new-vehicle sales are expected to dip slightly in the third quarter from a year earlier, according to car-shopping firm Edmunds. Analysts have been expecting auto sales to be flat or down for 2026 overall, compared with a year prior, suggesting that higher sticker prices and gas prices are wearing on consumers.

Taken together, sales by Detroit's three big automakers declined in the third quarter, according to sales reports and estimates from industry-research firm Cox Automotive. GM and Ford Motor have leaned in to selling their more profitable SUVs and pickups as they have largely pulled out of the sedan business. GM hiked its full-year profit forecast in July, and this week executives said demand for its diesel-powered Chevrolet Silverado and GMC Sierra pickups remains strong despite record-high diesel prices.

"It is really important to us that we do keep that mix and that we don't just respond to today's gas prices," said GM North American chief Duncan Aldred at the Detroit event.

Despite the downward slide in sales, GM was able to hold on to its crown as America's top carmaker by volume, a title that Toyota is closing in on. A GM spokesman said sales of its full-size pickups were up in the third quarter, even as the automaker is transitioning to significantly updated model-year 2027 trucks.

Meanwhile, foreign competitors notched gains over the past three months as rising sales of more budget-conscious options helped boost their results.

Honda on Thursday said its passenger cars rose 18% in sales in the third quarter, their best performance since 2020.

"Because of increased pressure on the consumer, they are considering a passenger car today when before they weren't," Lance Woelfer, vice president of auto sales at Honda's American unit, said in an interview.

Sales of the Accord sedan jumped as buyers who may have been looking for a small SUV considered a sedan instead, he said. The Civic sedan, meanwhile, is in short supply.

Ford doesn't release its quarterly sales data until Friday but Cox forecasts its sales fell 7% in the quarter. A shortage of components forced Ford to temporarily halt production of the F-150 pickup, the top-selling vehicle in America, which impacted the automaker's third quarter sales, Chief Executive Jim Farley said Wednesday.

Jeep-maker Stellantis has been racing to introduce new models and recoup market share it shed in recent years. Sales were flat for the quarter. CEO Antonio Filosa said at the Detroit event that Chrysler, which Stellantis owns, will soon begin selling cheaper vehicles. Stellantis, which also includes Jeep and Ram, has few vehicles with sticker prices below $40,000.

"We have a huge opportunity below $40,000," he said. "We know that we can get there."

 

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