C&D: Ford and Chevy losing buyers due to compact car discontinuation

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kevm14
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Joined: Wed Oct 23, 2013 10:28 pm

C&D: Ford and Chevy losing buyers due to compact car discontinuation

Post by kevm14 »

https://www.caranddriver.com/news/a2979 ... 675&src=nl
Ford and Chevy Are Losing Buyers after Discontinuing Compact Cars: Report
Many current Cruze and Focus drivers are trading for Escapes and Equinoxes, but also Civics and Corollas.

[*]A new report from Edmunds.com shows a decline in brand loyalty since Ford and Chevy ended production of the Focus and Cruze compact cars.
[*]Fewer Focus and Cruze drivers are trading in their vehicles for new Ford and Chevy models in 2019 compared to 2016.
[*]The Ford Escape and Chevy Equinox crossovers are among the top vehicles that owners trade in Focus and Cruze for. So are competitors such as the Honda Civic and Toyota Corolla.
Hilarious. The dumbest headline ever?

I can't even...

OK, I'll read.
Ford and Chevy are losing a loyal set of buyers since discontinuing the Focus and Cruze compact cars, according to a new report from Edmunds.com. Brand-loyalty data shows that fewer Focus and Cruze owners in 2019 are buying another Ford or Chevy for their next vehicle than they did in 2016, with Focus brand loyalty dropping from 40 to 33 percent and Cruze brand loyalty dropping from 57 to 45 percent.

The data also shows that competitors such as Toyota and Honda are gaining from Ford and Chevy's loss. Because the compact-car segment still makes up a significant 9.1 percent of all new-vehicle sales this year, Focus and Cruze buyers are trading in for competitor models including the Honda Civic and Toyota Corolla at higher rates. Both the Civic and Corolla are increasingly being bought by customers trading in a Focus or Cruze. Through October 2019, Honda reported Civic sales up 0.6 percent and Toyota reported Corolla sales down 0.3 percent.

To be fair, Ford and Chevy's crossover offerings including the Equinox, Trax, Escape, and EcoSport are also benefiting from the discontinuation of the Cruze and Focus. More people are trading in their Focuses and Cruzes for these small crossovers than before. While this may be better for these companies' bottom lines, as these SUVs generally cost more than the compacts they effectively replace, it's a loss for consumers looking for affordable new cars. The Chevy Equinox's base price is $6125 higher than the Cruze's, and the 2020 Ford Escape's base price is $7255 higher than the Focus's, although it's tough to make a direct comparison because 2018 was the last model year for the Focus.

Edmunds also states that even buyers trading in Focuses and Cruzes for small SUVs are defecting to Honda, Toyota, Hyundai, and Kia in increasing numbers. The report also predicts that brand loyalty will likely decline even more in the future as more Ford and Chevy small-car owners search for replacements for their vehicle.
The only silver lining I can possibly divine Is that the Cruze started with a noticeably higher brand loyalty than the Focus, and ends with significantly more loyalty, but lost more in the process. I don't really know what this means.

I think one interpretation is that buyers looked at the crossover equivalents to the Cruze and Focus and like the author notes, they are between 6 and 7 grand more expensive. I think on the whole consumers have long voted that they feel like they get more for the money, but for buyers who are sticking to their budgets, I can see them simply going to Toyota, Honda, Hyundai or Kia for a small car. Again, I think this is actually not a major trend and probably does not deter Ford or GM (I would assume they took this into account - they may seem dumb but this isn't the 1970s; they are not going to merely assume that a former Cruze owner, who cannot afford an Equinox would simply buy a Trax...or maybe they did?) but it is interesting to look at the report.
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