According to Ford and GM, the interest in purchasing SUVs by compact car owners is not as high as they thought.
It is clear that Ford, and GM’s decision not to make cars available for SUVs are controversial. Ford is abandoning its compact car and sedan segmentsin America to concentrate on profit-happy SUVs, trucks and other vehicles. The idea is that these segments will continue to be loyal and then switch to SUVs. An analysis by shows that a large number of these buyers are leaving Ford and GM to go to other companies who offer the vehicle they desire.
This study examines Ford Focus, and Chevrolet Cruze owner – two popular compact cars that were recently discontinued in the U.S. Edmunds found that 42 percent of Focus and Cruze owner aren’t making the leap to SUVs. 23 percent of Cruze owners have left Chevrolet to buy a car from another manufacturer. This number is even higher for the Focus camp. Nearly a third of former Blue Oval owners traded in their car to get a vehicle from another manufacturer.
Where are these buyers going to buy? Although the study does not offer any concrete statistics, it does indicate that there are “competitive alternatives” like the Toyota Corolla or Honda Civic. These two compact cars have remained among America’s top-selling models despite the emergence of SUVs. Some of these buyers may be switching to compact crossovers from automakers such as Jeep or Hyundai.
However, the study shows that not all of these buyers are loyal to Ford or GM. According to the study, 21 percent of Cruze owners traded up for a Bow Tie-badged SUV while 18% of Focus owners purchased another Ford. Both companies are losing customers, even though they don’t want the extra cash that comes with buying an SUV, even entry-level models such as the Ford EcoSport and ChevyTrax which both have base prices exceeding $20,000. Even though the sedan and compact car segments have been declining, they still account to over 4.5 million sales through 2019. This is a lot of buyers that you can’t just abandon and it’s not over for 2019.
Is this strategy all-SUV? We will only know the outcome over time, but if we were at Ford or GM, we would be concerned right now.