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When good cars sell badly
Most automakers have a model that fails to catch on
 | A long row of unsold 2007 Avalons sits at a Toyota dealership in the southeast Denver suburb of Centennial, Colo., earlier this year. Avalon sales are off sharply this probably because buyers associate full-sized cars with poor gas mileage. |
David Zalubowski / AP file |
Why do some cars resonate with consumers, while others get passed by as they sit on the side of the dealer's lot? And that lot can be much crueler than a high school dance: For many of these wallflowers, if they sit long enough, they get discontinued.
On Oct. 17, there were reports that Chrysler would ax as many as five current models from its lineup. These models very likely could be those with the weakest sales, such as the Chrysler Aspen and Pacifica, and the Jeep Commander and Liberty. But sales are not always the sole factor when determining a model's success or failure. After all, some models, such as the Chevrolet Corvette or Lamborghini Gallardo, are not built to be high-volume cars. Other models can be sluggards because buyers know that there is an upcoming redesign. The majority, of course, don't sell well because they are poorly conceived, too expensive, unreliable, or just plain ugly.
But then there are perfectly attractive cars that often win raves from reviewers and score well in safety and quality surveys, but, try as they might, still can't get invited to dance.
One example is the Hyundai Azera. The name may not sound familiar — the all-new Azera replaced the even less memorably named XG350 model two years ago. In the 2007 J.D. Power and Associates APEAL (Automotive Performance, Execution and Layout) Study, its owners gave the Azera the highest marks in the Large Car segment, ahead of better-known competitors like the Toyota Avalon and the Dodge Charger.
"The people who discover it really, really love it, and we're proud of that," says Hyundai spokesman Miles Johnson, adding that the Azera is selling well enough to meet expectations. However, Azera sales were down 16%, to 17,361, year-to-date through September.
A problem for Hyundai is, customers almost have to discover the Azera for themselves. Except when it was first launched, it hasn't had much model-specific advertising. Instead, Hyundai has been running ads to promote the entire brand, which may or may not specifically include the Azera.
Sharing the spotlight
There are several factors that can lead to becoming an automotive wallflower. First, they aren't marketed consistently. Besides the Azera, the Kia Amanti is another example. South Korean parent company Hyundai Motor controls both the Hyundai and Kia brands, and the two cars share a platform. Both brands are expanding their lineups to become "full-line" manufacturers. That imposes a heavy advertising burden, to acquaint shoppers with all the new models, especially if they occupy a segment and a price position that are new to the brand and different from the brand's recent history.
In September, the first full month in which the new C-Class was available, C-Class sales were up 15% vs. the year-ago month. The outgoing C-Class was already selling well, with sales up 13% year to date through July. The new model went on sale Aug. 7. Meanwhile, despite discounts including special lease deals, the R-Class continues to struggle, with sales down 30% year to date through September.
Crowded field
Second, their competition, both external and internal, may outshine them. The Saab 9-5, for instance, is fun to drive, well equipped, and especially well engineered for safety, but it competes with European heavyweights like BMW and Mercedes-Benz, which have bigger engines, more prestige, more awareness, more of almost everything.
With prices starting around $35,000, the 9-5 is more expensive than entry-level luxury models like the Mercedes-Benz C-Class. At the same time, while it is less costly than midrange luxury models like the BMW 5 Series, the Saab lacks the upscale equipment to compete with those models, especially six- or eight-cylinder engine options. All 9-5 models have a turbocharged, 260-hp, four-cylinder engine.
Meanwhile, the entry-level Saab 9-3 is the center of gravity for the Saab brand, in terms of sales volume and brand image. Through September, the 9-3 accounted for 70% of Saab's total U.S. sales year to date. The Saab 9-7X SUV was next-highest, at 16%; the 9-5 was last in the lineup, at 13% of the Saab total.
Between the cracks
Third, automotive wallflowers, from a competitive standpoint, are awkwardly positioned, with the wrong combination of strengths and weaknesses. In automotive terms, a wallflower may be too expensive for a modest competitive set but not prestigious enough for the next-highest group of competitors.
The Volkswagen Passat is an example of a car that in some ways is between two competitive sets. It is more expensive than competitors like the Honda Accord. At the same time, it is more affordable but less prestigious than cars like the A4 from its sister Audi luxury division. Through September, Passat sales were down 33% year to date vs. the year-ago period, to 28,583.
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