Americans Are Turning Away From Subcompacts In Droves; Chevrolet Sonic Plant Shutdown Lengthened


2017 Chevrolet Sonic - Image: Chevrolet American car buyers are increasingly turning their backs on subcompact cars.

During the first six months of 2017, the subcompact car losing the greatest number of sales is the Nissan Versa, which is suffering as Nissan realigns its dealer strategy to emphasize certified pre-owned cars.

But the subcompact car losing the second-highest number of sales is the Chevrolet Sonic, which has declined 37 percent this year (for a 10,334-unit decrease). In a continued attempt to dramatically reduce Sonic inventory — GM had a 159-day supply at the beginning of June; a 43-day supply at the beginning of July — GM is extending the scheduled plant shutdown at the Chevrolet Sonic’s Orion Township assembly plant north of Detroit, Michigan.

There are side effects from such a shutdown, an aftertaste following the swallowing of a bitter pill, spin-offs from a show nobody was watching to begin with.

2017 Chevrolet Bolt - Image: Chevrolet One such by-product of the extended summer shutdown is a temporary stoppage of Chevrolet Bolt production. In fact, it’s the Bolt’s production lapse that ignited headlines at Reuters and elsewhere. As a result of a days supply figure of 111 days heading into July, according to Automotive News, there’s a suspicion that the Chevrolet Bolt simply isn’t taking off the way a high-range electric car ought to. Only 7,592 Bolts were sold in the U.S. in the first-half of 2017.

And while Bolt sales aren’t and won’t soon be particularly high, those sales — steadily rising sales, mind you — were produced in limited markets. Moreover, while the Bolt’s 111 days of supply is excessive in an industry where 60 would be preferable and for an automaker that wants to get its overall supply down to 70 days by year’s end, days supply is based on past sales. General Motors expects improved sales now that inventory is ramping up in a broader section of America and wants to have the necessary inventory to meet demand in more markets.

Granted, the Chevrolet Bolt has not taken the world by storm, and if GM uses a plant shutdown to allow for an adjustment in Bolt inventory, it speaks to the car’s dearth of early demand. But judging the Bolt based on limited market availability over a span of a few months is unnecessary when GM, quite believably, says the Orion Township assembly plant shutdown is, “due solely to softening sales of the Sonic.”

There are no waiting lists for the Chevrolet Bolt, there’s no captivating exterior styling to speak of, there’s no EV magnate hyping embarrassing early builds. But if you want to point to a section of the market where GM truly needs to adjust its strategy, the Chevrolet Sonic’s subcompact sector is it. If ever there was a time at which General Motors could succeed in the United States with a fun-to-drive subcompact car, 2017 isn’t it.

Orion Township was previously the assembly site for the Buick Verano, a now discontinued compact car. Verano production ended late last year. With Sonic demand shrinking even faster than the plunging subcompact sector as a whole, one wonders how long before GM’s Orion Township assembly plant is a site purely operational for EVs.

Subcompact Car June 2017 June 2016 % Change 2017 YTD 2016 YTD % Change
Nissan Versa 8,155 14,683 -44.5% 56,558 72,461 -21.9%
Hyundai Accent 5,028 3,139 60.2% 32,515 39,330 -17.3%
Honda Fit 4,444 5,034 -11.7% 26,322 27,385 -3.9%
Toyota Yaris 3,708 4,239 -12.5% 25,604 23,011 11.3%
Ford Fiesta 4,026 4,064 -0.9% 24,580 25,539 -3.8%
Chevrolet Sonic 6,550 7,583 -13.6% 17,958 28,292 -36.5%
Toyota Prius C 867 1,355 -36.0% 7,049 11,573 -39.1%
Kia Rio 963 5,238 -81.6% 6,685 15,368 -56.5%
Total 33,741 45,335 -25.6% 197,271 242,959 -18.8%

U.S. sales of subcompact cars are down 19 percent this year, a loss of nearly 46,000 sales in the first half of the year. Only the Toyota Yaris, which generates three-quarters of its sales from a sedan that’s actually a Mazda 2, is enjoying improvements compared with the first-half of 2016.

In part, the Hyundai Accent and Kia Rio losses are due to a replacement phase as the two Korean cars wait for MY2018 replacements. Hyundai is shrinking its subcompact car portfolio by eliminating the Accent hatchback as the company prepares to launch the new Kona subcompact crossover. Ford appears to have no North American plans to replace the current Fiesta with the seventh-gen Fiesta that’s already on sale in other markets, apparently intending to rely on the EcoSport instead. The Honda Fit, America’s third-ranked subcompact car, is refreshed for 2018, but while Fit sales have been mostly steady over the last five years, 2017 volume is on track to be nearly a third lower than they were in 2008.2017 Chevrolet Trax - Image: Chevrolet As recently as 2014, America’s core group of subcompact cars formed 3.2 percent of the market, generating more than half a million sales. The subcompact segment’s share of America’s new vehicle market has dropped by nearly a point since then, falling to 2.3 percent in the first half of 2017.

Americans are on track to purchase and lease 375,000 subcompact cars this year.

Making up much of the shortfall, of course, are subcompact crossovers based on these very subcompact cars. At General Motors, for instance, the loss of 10,000 Sonic sales in the first-half of 2017 is more than made up by 7,800 Trax sales and 5,900 Buick Encore sales.

[Image: General Motors]

Timothy Cain is a contributing analyst at The Truth About Cars and and the founder and former editor of Follow on Twitter @timcaincars.