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THE passenger car, and particularly the sedan, appears to be headed for the history books as buyers dump the conventional car and switch to SUVs.

The trend is in line with the requirements of companies fielding rent-based autonomous compact vehicles as future personal urban transport.

Without the need for a small car in their garage, the arrival of autonomous vehicles (AVs) will, according to a KPMG report, lead to motorists buying larger vehicles – SUVs and utes – for travel beyond the city limits.

The scenario is not only backed up by the KPMG report ‘Islands of Autonomy’ but confirmed last month as Ford announced it would kill off most of its passenger cars in the United States – in favour of more utes and SUVs – because sedans were no longer profitable, especially as they required regular and expensive model updates.

Ford may not be alone. General Motors may also consider downsizing its car fleet as the utes and SUVs bring in the big profits.

Nissan Maxima

In Australia, 38 per cent of the passenger car segment is sedans (not hatchbacks or wagons). Some – like Nissan, Mitsubishi (the Lancer ended production in December), Citroen, Fiat and Suzuki – no longer offer a sedan in Australia.

Sedans also make up only 13.4 per cent of the total vehicle market, compared with SUVs at 42.2 per cent.

Holden and Ford have two – the Astra sedan and Commodore liftback, and Focus sedan and Mondeo liftback respectively – as does Toyota (Corolla and Camry).

Honda has three – City, Civic and Accord – and Hyundai has four, while Mazda has three and Mercedes-Benz has five.

A decade ago, sedans made up 45 per cent of the passenger-car car segment and included three sedans from Alfa Romeo and four from Holden.

In the US, autonomous ride-hailing services Wayco and General Motors’ Cruise have indicated they would not use conventional sedans and instead opt for the more versatile body styles of SUVs and crossovers.

The KPMG report said this move by the ride-hailing services “will cause sedan sales to consumers in the US to fall from an estimated 5.4 million this year to 2.1 million by 2030”.

Nissan Pulsar

The blame is also levied at consumers who have lost interest in cars as their design preferences shift to roomier rides. As well, steady, low fuel prices in the US have given them confidence in buying bigger vehicles.

The KPMG report said that as self-driving cars reduce the price of ride-hailing services, smaller vehicles will become expendable for many US households.

The report by KPMG analysed travel and smartphone location data in several US urban markets to determine how consumers’ transportation habits will change once autonomous mobility services enter those areas.

Self-driving taxis are expected to cause a drop in the cost of ride-hailing services, and the report predicts that consumers will opt to use those services for intra-city and suburban-to-city-centre trips including work commutes.

That, in turn, will lead consumers to ditch smaller cars, and keep larger vehicles like trucks and sport utility vehicles (SUVs) for longer family trips, the report said.

“This market shift will lead many automakers to stop producing small and mid-size sedans altogether,” the report said.

KPMG said the number of automakers making large numbers of sedans for the US market will eventually fall from 10 today to only three or four.

Fiat Chrysler Automobiles has already exited the small and mid-size sedan market in the US, and many other automakers are moving to trucks and SUVs.

In the US, the trend away from cars accelerated in February. New-vehicle sales dropped 2.4 per cent for the month compared with the same month in 2017, but cars fell 12 per cent.

By Neil Dowling

Mitsubishi Lancer