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Return of the family sedan an economic indicator?

By Claes Bell, CFA · Bankrate.com
Thursday, May 20, 2010
Posted: 11 am ET

Are family sedans the automotive equivalent of long skirts? It's often said you can measure how the economy's doing by looking at women's hemlines. The longer womens' skirts are on average, the worse off the economy is, or so the axiom goes. Does the return of the sensible, conservative family sedan send a similar message that the economy is still in rough shape?

Midsize car's share of U.S. market
2002 15.6%
2003 14.5%
2004 14.1%
2005 13.3%
2006 13.6%
2007 14.5%
2008 16.5%
2009 17.7%
2010 17.8%*
Source: Edmunds.com
* through April 30, 2010

Think about it: In the go-go days of the real estate boom, the share of autos sold that were SUVs or trucks rose, while the number of sensible family sedans fell, reaching a low of 13.3 percent in 2005, according to Edmunds Auto Observer. But since the economy started going sour in 2007, the percentage of family sedans sold has risen significantly, while the share of SUVs has fallen. The sensible-shoes Honda Accord is now leading the pack in this category, and may reach sales of 300,000 this year.

And why not? A midsize sedan like the Accord makes a much better recessionmobile than your average SUV. Good gas mileage, good resale value, looks that are conservative enough to not go too far out of fashion by the time you can afford to buy another car, and they can comfortably seat a family of five if you need to downsize to one car. They also make good car pool cars if you and a few of your work friends band together to save gas money.

Do you think you're a more practical car buyer now than you were a few years ago?

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2 Comments
Claes Bell
June 02, 2010 at 12:29 pm

Actually, my understanding is that that during boom times, commodity prices for things like wool and cotton rose, encouraging clothing companies to create shorter designs to save on fabric. And the originator of the theory, Wharton School economist George Taylor, theorized it had more to do with whether women could afford silk stockings: If they could, they would show them off below shorter skirts; if they couldn't, they would hide their legs beneath longer skirts. As far as my alleged sexism, I'm not saying that I'm immune to sexism or being flat-out wrong, but in this case, I feel pretty comfortable with what I wrote. My comparison wasn't so much about women as it was comparing the economic ramifications of one household purchase to another, in this case clothing and cars.

driverseven
June 02, 2010 at 9:46 am

That old saw about hemlines is that it was supposed to be linked to the stock market, not the economy.

The operative word here is "old" -- as in, back when the stock market was a boy's club where sexism was rampant.

I guess that day still applies to automotive writers.