NEW YORK, March 28 (Reuters) - Japanese automaker Nissan Motor Co Ltd on Wednesday unveiled an all-new Altima sedan, and demonstrated the auto industry’s problem adjusting new-model investments fast enough to keep pace with shifts in consumer demand.
The Altima, and rival midpriced sedans such as Toyota Motor Corp’s Camry and Honda Motor Co Ltd’s Accord, used to be high-volume sellers, keeping assembly lines rolling full-time. All three automakers several years ago committed to significant redesigns of their sedans.
Since those investments were made, demand for midsized cars has collapsed in the United States due to the growing consumer appetite for larger SUVs and pickup trucks. Sales of sedans made up 36.8 percent of the U.S. market in 2017, down sharply from 51.2 percent in 2012.
Through February this year, sedans made up 33.3 percent of new-vehicle sales and are down 12 percent versus the same period in 2017.
Jack Hollis, Toyota’s North American head of sales and marketing, said the automaker expects by the end of 2018 sedans will make up around 30 percent of sales.
Last summer, Honda launched its all-new Accord, arguing that the well-reviewed sedan would help it maintain sales levels in a declining market. Instead, sales of the new Accord dropped nearly 16 percent in February from a year ago. Honda said that between April and June it will halt production at its Marysville, Ohio, plant for 11 days to reduce a high inventory of unsold vehicles.
Nissan executives at the New York auto show on Wednesday said the new Altima has a chance to buck the trend.
Nissan has added all-wheel drive, automatic rear braking and some autonomous features that help drivers stay in their lane or remain a set distance behind the vehicle in front to make the revamped Altima more attractive to consumers.
“This (new Altima) sends a message that the sedan is back,” Nissan’s senior vice president for global design, Alfonso Albaisa, said as he stood beside the new sedan onstage at the New York auto show.
Rivals are shifting their investments to trucks and sport utility vehicles. Intensifying competition among automakers to sell sedans should lead to higher discounts and narrower profits, said car-shopping website Autotrader’s executive publisher, Brian Moody.
“That’s good news if you want to buy a sedan because you should be able to get a good deal,” Moody said.
Johan de Nysschen, head of General Motors Co’s luxury Cadillac division, reiterated the company’s plans to cut the number of sedans in its family of vehicles, the smallest of which will be focused more on the Chinese market rather than U.S. consumers.
Like other brands, Cadillac is adding sport utility vehicles and crossovers to its lineup.
“Just as we are rebalancing our portfolio and reducing our number of sedan entries, so I imagine others will be doing the same,” de Nysschen told Reuters on Wednesday. “The market just won’t sustain that many derivatives anymore.”
The three big Japanese automakers, however, have large U.S. factories dedicated to midsized sedans such as the Altima, Camry and Accord.
Toyota’s Hollis said Toyota remains committed to sedans.
“We’re not pulling anything back, we will continue to invest,” he said. “If other players want to pull out, fine, we’ll just take more market share.” (Additional reporting by David Shepardson in New York Editing by Joe White and Matthew Lewis)