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Jan 22

The Car Is Not Dead

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Many people might think that the traditional gas powered vehicle is on its last legs and basically dead. However, that may not be the case just yet.

Several people at the Detroit Auto Show representing companies such as Volkswagen, Nissan, Hyundai, and Honda wanted to let everyone know that they probably shouldn’t get attached to the thought of the dead car. According to MSN.com, it seems that automakers are confident that their sedans can still remain profitable.

This is a bold statement since other automakers like Ford, Fiat Chrysler, and General Motors have all expressed some level of confidence in being able to sell SUVs (Sport Utility Vehicles) and pickups. These types of transport vehicles apparently account for around 70-75 percent of the market in the United States.

Henio Arcangeli Jr., Senior Vice-President of Automotive Operations for Honda Motor Co.’s U.S. unit, said: “Many people are talking about the demise of the passenger car, but if you just do the basic mathematics, there were over 5 million passenger cars that were sold last year and will be sold this year — that’s a huge market.”

Despite their confidence, it doesn’t really hold up in every part of the world. The Asian and European manufacturers sell the sedan in locations where it is both profitable and popular. This means that they’ll likely be able to hold onto that model for a longer amount of time when compared to drivers in the U.S market, which typically favors larger vehicles.

Oddly enough, the automakers making a push toward electric vehicles are still keeping themselves in the gas powered sedan market. The bottom line is that the sedan has the ability to present an affordable option when compared to an SUV. When looking at Nissan, the company may have gotten around 60% of volume last year from light trucks, but it will still keep an eye on cars. As Chief Planning Officer Philippe Klein put it, the company doesn’t see “the sedan going to zero.”

It’s obvious that companies want to make more money, but don’t want to ditch an entire market area since that would hurt their profitability, especially if the demand for that specific type of vehicle was to increase in the future.

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