Photographer: Daniel Acker/Bloomberg

Automakers in Detroit Show Off New Cars as Consumers Crave SUVs

  • Timing a `head-scratcher' amid new Buicks, Hyundais, Mercedes
  • Passenger cars lost market share in industry's best year ever

What do the Buick Avista coupe, a Mercedes roadster and Hyundai’s Genesis G90 luxury car have in common? They are among the hottest cars on display at the Detroit auto show.

There’s just one problem: The models that excite car buffs aren’t what the public is buying. While people like to ogle sexy coupes and sedans, when it comes time to buy, they go for roomy sport utility vehicles.

The Buick Avista concept vehicle
The Buick Avista concept vehicle
Photographer: Andrew Harrer/Bloomberg

“You see a nice sedan, a hot coupe, and some more sedans,” said Jack Nerad, executive market analyst for automotive-pricing firm Kelley Blue Book. “It’s just not what the market is buying. It’s a real head-scratcher.”

In 2015, the best year in U.S. automotive history, passenger car sales fell 2.2 percent while sales of light trucks -- pickups, minivans and SUVs -- soared 13 percent. Sales of crossover SUVs like the tiny Buick Encore and the BMW X5 rose 19 percent, according to research firm Autodata Corp.

That’s the paradox on display at this year’s Detroit auto show. Mercedes-Benz had Indie pop singer Ryn Weaver serenade the debut of its SLC roadster, a 363-horsepower looker that replaces the SLK. But Mercedes car sales fell in the U.S. last year while SUV sales soared.

The Hyundai 2017 Genesis G90
The Hyundai 2017 Genesis G90
Photographer: Andrew Harrer/Bloomberg

Hyundai Motor Co. had its own debutante ball for its new Genesis luxury division, which showed off the flagship G90 sedan. Entering the luxury market is never an easy ride, but Hyundai is going after it with the kind of long, sleek sedan that wealthy car buffs love. Its seats can be adjusted 22 different ways. The car offers a 420-horsepower V-8 engine and, according to Hyundai, better handling than a Mercedes S550.

Toyota Motor Corp.’s Lexus also unveiled a dynamic performance vehicle: The LC 500 sports coupe accelerates from 0-to-60 miles per hour in under 4.5 seconds, faster than the Mercedes SL550, and will start at about $100,000 when it goes on sale in 2017.

Gasoline Prices

Powerful cars should be selling well. Crude oil prices have fallen to their lowest prices in 12 years at about $31 a barrel. That has gasoline averaging less than $2 a gallon across the U.S.

But it isn’t helping luxury brands sell their car models. Take the Mercedes E-Class, the mid-sized Benz that starts around $53,000. In a hot car market with cheap gasoline, its sales fell 25 percent to just under 50,000 cars. Sales of the rival BMW 5 Series fell 16 percent to 44,000 cars. The Cadillac CTS sedan fell 37 percent to less than 20,000 cars as its buyers looked across the showroom for the SRX crossover.

The Lexus LC 500
The Lexus LC 500
Photographer: Andrew Harrer/Bloomberg

“SUVs seem to be the zeitgeist,” said Uwe Ellinghaus, Cadillac’s chief marketing officer. “They are more practical and versatile and they are now completely acceptable among business and luxury buyers.”

What that says is that one of the car companies might have lit up the show with a good crossover SUV or some other sport utility vehicle.

Timing ‘Anomaly’

The lack of SUV introductions is “just an anomaly of timing,” said Ford Motor Co. Executive Chairman Bill Ford, “because the SUV segment is growing so fast and there are a lot of models proliferating.”

Ford, which is planning to bring back the Bronco model, has four new SUVs coming over the next four years, including updates to existing ones. But all the Ford brand had to show was a spruced up Fusion family sedan.

“There are no show stoppers” at this year’s event, said Jeff Schuster, an analyst with LMC Automotive. “There definitely was an opportunity to give consumers what they want. And what they want is SUVs."

Buick did have a new SUV to show, at least one that is new to Americans. The Envision will be imported from China this year. For its North American debut, GM had it tucked away to the right of the stage where the much-praised Buick Avista concept coupe was shown. Buick got some buzz in Detroit this year with a car it isn’t planning to make -- a 400-horsepower coupe built on the underpinnings of the Chevrolet Camaro sports car.

When asked why GM wouldn’t sell it, company President Dan Ammann was pragmatic: “Because everyone wants SUVs.”

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