The sedan debate

The data are clear: the sedan is dead. Or is it? S&P Global Mobility registration and loyalty data support both sides of this discussion. First, let's look at the trends pointing to the sedan's demise.

In Q3 2022, the latest quarter for which S&P Global Mobility has complete data, sedan's share of the U.S. market dropped to 16.4%, down two percentage points from a year ago and seven points from four years ago (as a reminder, each percentage point is equal to total annual Cadillac registrations to individual consumers). Sedan share of luxury has declined at a faster rate, retreating more than nine points over the past four years to 23.3% in Q3 2022.

Sedan Share of Industry, Mainstream and Luxury

Sedan Share of Industry, Mainstream and Luxury

Loyalty to the sedan body style also suggests its days are numbered. As illustrated below, the percentage of return-to-market (RTM) sedan households who acquire another one has fallen to 36% in Q3 2022, down over seven percentage points from 43.6% four years ago.

And, again, luxury sedans have suffered more than mainstream sedans: the percent of luxury sedan households that acquire another sedan has fallen more than eleven percentage points to 35.5%. Just in the past twelve months, luxury sedan loyalty has dropped more than six points.

From 2018 through the start of 2022, luxury sedan loyalty had consistently been higher than industry or mainstream sedan loyalty, but these metrics all merged in Q3 2022 and have remained similar in October and November.

Sedan Loyalty in Industry, Mainstream and Luxury

Sedan Loyalty in Industry, Mainstream and Luxury

Third, the sedan's loyalty decline has not only mirrored that of passenger vans (whose market share November 2022 CYTD is 2.1%), sedan loyalty has actually dropped at a slightly faster rate than the van decrease. As shown below, the slope of the line indicating sedan body style loyalty is a little steeper than the slope of the passenger van line*, and the table on the right includes the data supporting this finding (amazingly, the total six-year declines of the two groups are remarkably similar to one another, with sedan down 14.6 percentage points and passenger vans off 13.7 points).

Body Style Loyalty for Passenger Vans and Sedans

Body Style Loyalty for Passenger Vans and Sedans

Lastly, the number of sedan models on sale has dropped sharply over the past four years to just 28 mainstream vehicles (only three of which are from legacy domestic brands). Admittedly, the luxury sedan count has remained steady, but bear in mind that the luxury market accounts for only about 17% of the industry.

Sedan Model Count for Mainstream and Luxury Brands

Sedan Model Count for Mainstream and Luxury Brands

But there are at least two data sets suggesting sedans still have some life left in them. First, a review of monthly sedan loyalty since 2016 (see below) shows that sedan loyalty in the first eleven months of 2022 has been going against the trend (of the results in any of the other years) and is going up. November 2022 sedan loyalty of 37.4% was 2.7 percentage points higher than a year ago.

Sedan Loyalty

Sedan Loyalty

Second, a closer look at sedan loyalty in just the two most recent years, reveals that this metric's pattern in 2022 has been different from that a year earlier. Industry-wide sedan loyalty in the January-November 2022 time period has been steady, in contrast to the more uneven pattern a year ago.

Sedan Loyalty for Industry, Mainstream and Luxury

Sedan Loyalty for Industry, Mainstream and Luxury

Regardless of one's opinion about the future of the sedan, everyone is in agreement that this body style has been marginalized. And, with this movement has come a similar decline in couples and convertibles, which usually are derived from the traditional sedan body style. But ingenuity remains alive and kicking - we now are seeing more and more coupe derivatives of the traditional sport utility body style (although convertible utilities remain a work in progress).

*Passenger vans are used in this discussion, as opposed to total vans, because the latter include vans used mostly for commercial purposes.