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KBB: Full-Size Cars in Trouble

May 30, 2013

IRVINE, Calif. ─ April new-car sales were up 8.5 percent while the seasonally adjusted annual rate dropped to 14.9 million, Kelley Blue Book reported yesterday.

Sales improved only 4.2 percent in April, which is well below the pace through the first quarter. Market share for full-size cars declined to 3.3 percent, with sales falling 10 percent from April 2012. Year to date, the full-size car segment was down 1.2 percent, which is far behind the overall industry’s 6.9 percent increase.

“In the long term, we don’t believe full-size cars will improve market share,” said Alec Gutierrez, senior market analyst of automotive insights for Kelley Blue Book. ”Instead, we expect market share to flatten out in the 3 to 4 percent range. Full-size cars don’t present a compelling value proposition for most since mid-size sedans offer similar space and utility with greater fuel economy for less.”

Compact crossovers drove industry growth in April, with sales increasing 28.9 percent from last year. Market share for the segment grew to 12.9 percent of the industry, an all-time high.

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