by American Automakers May Bring Sedans Back
Americans adore SUVs and pickups. However, they are not the only ones. Australians feel the same, and even Europe has largely capitulated to SUVs and crossovers.
In the US, the average size of new cars has increased significantly over the past few decades, as manufacturers moved away from traditional sedans in favor of trucks and SUVs with higher profitability. However, there are now signs that the pendulum may swing back the other way, and the humble sedan may be preparing for a comeback.
Detroit’s Retreat from the Sedan Market
Ford hasn’t sold a sedan in the US since 2018. GM assembled its last Chevrolet Malibu in 2024. Stellantis, meanwhile, is holding on to a few low-volume sedans, including the electric Dodge Charger Daytona, Maserati Ghibli, and Alfa Romeo Giulia.
Detroit wasn’t pushed out of the sedan market solely due to changing buyer preferences. American brands also found it difficult to compete with overseas rivals, such as Honda, Toyota, and Hyundai, which can produce these cars at a lower cost and still make a profit. Ford, by its own admission, couldn’t find an economically viable solution.
At the same time, the issue of affordability is becoming increasingly relevant. The average transaction price for a new car in the US now exceeds $50,000, putting additional pressure on automakers and forcing them to reconsider more affordable options.
Why America Abandoned Sedans
Ford boss Jim Farley acknowledged earlier this year that the company simply couldn’t compete with Japanese and South Korean brands in the small car market. However, the company is now exploring how it could bring a sedan back to its lineup.
“The sedan market is very viable. It’s not that the market isn’t there. We just couldn’t find a way to compete and be profitable. Well, we can find a way to do that,” Farley told reporters at the Detroit auto show last month.
One possibility is to produce a sedan at the same Kentucky site planned for the production of Ford’s future affordable pickup.
General Motors also wants to revive a sedan. GM President Mark Reuss recently stated at a corporate meeting:
“I would give anything to have a hybrid-electric sedan,” adding, “we are working on how to do that.”
Stellantis is also reconsidering its position. Chrysler CEO Chris Feuell confirmed that the brand is developing a compact car, expected to cost less than $30,000, signaling renewed attention to entry-level buyers.
Can the Numbers Finally Work?
For sedans to make any comeback, they must be profitable. That’s the crux of the matter, and as The Wall Street Journal notes, this has long been a problem in the US. Moving production to lower-cost countries like Mexico and South Korea didn’t save Detroit’s small cars last time. Even Toyota acknowledges that the margins are slim, stating that while it makes a profit from models like the Corolla, it’s “just not a lot.”
Passenger cars, which 15 years ago accounted for about half of new vehicle sales, now make up only 18% of the US market, highlighting how sharply tastes have changed.
Global Scale as a Strategy
A key reason why foreign brands have been able to continue selling sedans in the US is their broader global reach. For example, models like the Toyota Camry and Honda Accord are sold in dozens of markets worldwide, and this is perhaps what Detroit’s Big Three would need to do to launch new affordable sedan models.
There is also a strategic argument in favor of bringing back at least one sedan. Dealers and analysts have long described small cars as entry products that give first-time buyers an affordable entry point before they eventually move up to higher-margin SUVs and trucks within the same brand.
In an era of $50,000 average prices, that initial step may matter more than ever.
The return of sedans by American manufacturers could be an important strategic shift aimed at capturing a new generation of buyers for whom the starting price is a decisive factor. It could also help brands attract customers early on and retain them within their product ecosystem. The success of this initiative will likely depend on the companies’ ability to adapt their business models, perhaps through shared platforms or global coordination, to achieve the necessary economies of scale long enjoyed by their Asian competitors.
