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C-Cars Suffer From Consistent Sales Slump as CUVs Enjoy Gains

March 11, 2014

C-cars, or cars in the Compact Car segment, used to be a hit with buyers in the U.S. However, as WardsAuto’s data show, American drivers may now be favoring another type of vehicle.

Sales for the Upper Small segment dropped 6 percent overall last month, marking its six straight month of decline. This is quite surprising news, as the C-segment includes the auto industry’s most popular and highest-volume nameplates. The Toyota Corolla, Honda Civic and Ford Focus are among the four-door sedans that belong in this category.

Of all the vehicles in the C-segment, only the Hyundai Elantra reported gains in February. It also proved to be a consistent good performer, as it had a sales increase in five of the last six months.

The Ford Focus, along with the Mazda3, Subaru Impreza, Dodge Dart and Volkswagen Jetta experienced a slump from September to February. The slide for the Impreza and Jetta topped 3 percent while the losses for the Focus and Dart reached double-digit figures.

On March 3rd, Fiat Chrysler Automobiles announced that it was temporarily letting go of 325 workers at the Dart’s assembly plant in Belvidere, Illinois because of excess inventory.

The segment’s most well-known names are also struggling. Toyota Corolla, despite being the second best-selling C-car in the country, also faced a sales deficit. Even after the all-new 2014 model was released in September 2013, the nameplate only had two months of growth: October (8.7 percent) and February (1.2 percent).

Toyota blames the Corolla’s rival, the Civic, for contributing to their nameplate’s lower sales. According to Bob Carter, senior vice president-automotive operations at Toyota Motor Sales U.S.A., the Civic’s significantly higher incentives had something to do with the Corolla’s weaker performance. He mentioned that Honda gave a $3,000 dealer incentive on the Civic in addition to $2,500 cash.

The Civic may have played a part in the Corolla’s sales decline but it suffered losses of its own. Honda’s C-car saw its sales slide in four of the last six months. It reported a slight dip in January (0.3 percent) and had considerable deficit in November (15.9 percent). Despite the frequent drop in sales, the Civic was named the sales leader in the C-segment last year.

The Corolla and Civic may not be selling as well as they did several years ago, but their sales are enough to land them in the list of 2013’s best-selling vehicles in the U.S. The Civic dropped to 6th place while the Corolla fell to the 9th spot.

In the world of autos, one segment’s loss is another’s gain. Consumers are favoring another category over the C-segment, and this is the C-size CUVs (crossover utility vehicles). Buyers currently prefer slightly bigger vehicles and strong CUV sales attest to this.

The sales for WardsAuto’s Small CUV group advanced in the last six months, with growth ranging from 26.1 percent to 38.1 percent. These vehicles are doing so well that they are reporting volume similar to C-cars. For instance, Honda’s CR-V and Toyota’s RAV4 have enjoyed huge gains in the last couple of months. The latter sold 16,451 units in February, setting a sales record for the month.

Low gas prices and an improving economy are said to influence buyer’s preference towards CUVs.

Photo credit: Tino Rossini/ Flickr/ CC BY

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