[ChiragM]

According to a media report, Ford and Chevrolet's decision to discontinue small cars has resulted in a loss in market share.



The report suggests that 9.1% of the car market accounts for compact cars. In contrast, SUVs account for 47.9%. However, many buyers of compact cars like the Ford Fusion and Chevrolet Cruze are moving to compact cars from other carmakers instead of large SUVs and pickup trucks.

It is said that 23% of Cruze owners and 31% of Focus owners bought a car from a competitor. Customers bought cars like the Hyundai Kona, Jeep Compass, Subaru Crosstrek, Toyota Corolla, Honda Civic and Kia Forte instead of large SUVs from Chevrolet and Ford. It is said that the Honda Civic and the Toyota Corolla have gained from customers trading in their Fords and Chevrolets.

Brand loyalty is also taking a hit. In 2016, it stood at 57% and 40% for Chevrolet and Ford respectively but it has now declined to 45% and 33%.

Link to Team-BHP News

Source

[sumeethaldankar]

Well it's natural if they are going to stop producing a compact sedans, the customers who are looking for such vehicles would graduate to another companies which sell one. I think it's giving up totally on something like the compact car which actually built what Chevy and Ford are today. There were no SUV's/Crossovers in the beginning. Yes the times have changed but the USA is a very very vast market and there are demands for all kinds of vehicles.

They should not have stopped making those smaller cars. Compact vehicles make good city runabouts and short distance vehicles which combined with stuff like hybrid engines would make a good second car. Most US garages probably have a SUV and a compact car. Chevy/Ford expects the consumer to now buy 2 SUV's instead of one which the average customer may not find it feasible considering SUV's are more expensive then compacts.

[BZ25]

Don't know what the Ford and GM management were thinking when they decided to stop selling nearly all it's passenger cars, except SUVs. They need to understand that not all buyers want an SUV or a crossover. Some just want a funky hatchback or a practical saloon, and both had such excellent offerings in both segments.
They should really reconsider this pathetic decision, this also costed a lot of jobs, and let to the shutting down of many assembly plants in the USA.

[landcruiser123]

I think the Japanese and Korean brands consistently provide a superior overall ownership experience. Could be the reason that people also prefer their SUVs after getting a taste of the sedans.

Most millennials in USA have a lot of student debt and can't afford big SUVs. It's mostly the baby boomers/gen X who buy SUVs. Majority of these people have a hybrid car or a small sedan at home which is the second car. SUVs are a fad- Ford & GM will pay heavily for this move.

[kiku007]

It has happened before and it'll happen again. Ford and GM will pay a heavy price for placing all their eggs on the SUV basket.

[GTO]

It was a mad-man move & one to just appease the stock market / Wall Street. Short term gains, long term pain. How can you exit a segment that still sells millions of cars a year? Sure, sedans & hatchbacks have lost out to crossovers, but they are still selling in very good volumes. And God help these companies if petrol prices rise.

They've practically handed over the market to the Japanese & Koreans on a silver platter.

[dragracer567]

Originally Posted by GTO

It was a mad-man move & one to just appease the stock market / Wall Street. Short term gains, long term pain. How can you exit a segment that still sells millions of cars a year? Sure, sedans & hatchbacks have lost out to crossovers, but they are still selling in very good volumes. And God help these companies if petrol prices rise.

They've practically handed over the market to the Japanese & Koreans on a silver platter.

It's true indeed. This vox video really illustrates that fact (though they are making a wider point here). American companies (especially car companies) spend their profits buying back shares to reward their executives instead of reinvesting it back into the company. The end result is that they just can't compete!

https://www.youtube.com/watch?v=ylLTMYt24lA

[vb-saan]

Originally Posted by GTO

They've practically handed over the market to the Japanese & Koreans on a silver platter.

Yes, I was in Philadelphia couple of weeks back, and there are hordes of Civics, Elantras and Corollas on the road; much more than what I saw 3 years back!

[KiloAlpha]

This is how Ford and GM were thinking.
"Margins on compact SUVs are much bigger than on the equivalent hatch/sedan. Discontinue the hatch/sedan model lines, so customers come back to trade in their old hatch/sedan for a new SUV/Crossover."

Well, customers are increasingly trading in sedans for crossovers, but instead of going back to the Ford or GM dealership, they are headed to the Jap/Korean car maker dealerships. Quoting from the article:

However, even though Ford and Chevrolet have fielded models in the compact and subcompact SUV segments that have kept shoppers in the fold, the owners of the majority of Focuses and Cruzes that are traded in for SUVs still defect to other brands.
...
Hyundai and Kia have gained some recent tradein traction with small SUVs of their own, and over index with trade-ins of Focus and Cruzes from older model years. Honda and Toyota, the perennial compact-car segment leaders, have seen the largest increases and are bolstered by Focus and Cruze owners moving into their subcompact and compact SUVs.

Ford and GM made this strategic move when they were high on a Wall Street party. USA is not Wall Street. The economic signal that these companies sent out by withdrawing from these segments will haunt them far beyond the quarterly P&L statements that Wall Street cares about.