Hatchbacks find new terrain in stagnant car market

Ian Thibodeau
The Detroit News

Chicago — For all the talk about falling passenger-car sales, there is one market segment that is getting a shot in arm: hatchbacks.

Hatchbacks like the Chevy Cruze may spur some growth in the small-car segment, said Stephanie Brinley, IHS Automotive analyst.

At the Chicago Auto Show this week, Hyundai Motor America debuted the redesigned 2018 Elantra GT, a European-inspired hatchback that gets an added kick in the Sport trim also unveiled at the show. The 2017 Honda Civic Hatchback hit showrooms last fall, amping up the fun factor of the Honda staple. General Motors Co. rolled out the 2017 Chevrolet Cruze Hatch at last year’s Detroit auto show.

With those new offerings in the marketplace, the IHS Markit forecasting firm sees a 19 percent hike in sales of small hatchbacks this year, compared with declines in 2015 and 2016. By 2020, it forecasts sales of 567,000, compared with about 453,000 sold in 2016; sales of small cars overall are expected to keep sliding.

“Hatch provides you the small utility of a (compact crossover), but yet the driving dynamics of a car,” Michael Evanoff, manager of product planning for Hyundai Motor America, told The Detroit News on Friday. “The number one purchase reasons for the company hatchbacks is that they’re fun to drive... It’s the best of both worlds.”

A 2-liter, 162-horsepower inline four-cylinder with a six-speed manual or automatic transmission moves the Elantra GT. The Elantra GT Sport steps it up with a 1.6-liter turbo engine that creates 201 horsepower; it’s available with six-speed manual or a seven-speed dual-clutch gear box. Both engines bring a “driveability” factor that isn’t found in crossovers or SUVs, Evanoff said.

While the car still has less cargo area than a crossover, it offers enough to make it more appealing to some buyers than a sedan.

“It’s almost like (crossovers) were the anti-minivan, so maybe we have something like that with hatchbacks,” Evanoff said.

2018 Elantra GT

Stephanie Brinley, senior analyst with IHS Automotive, said hatchbacks might spur some growth in the small-car segment, but they won’t send sales through the roof.

“Hatchback sales have not traditionally been good in the U.S.,” she said. “It’s a relatively small opportunity ... they should help stem the losses in the (small car) segment.”

The additions of the Elantra GT and Cruze Hatch might serve to hang on to sedan customers who were looking for more utility, she said.

Michelle Malcho, spokeswoman for Chevy cars and crossovers, said Friday the hatch has found a niche market of more active, urban buyers who are looking for more functionality out of a small car.

“I think the U.S. likes the functional thought,” she said. “The hatch for some people offers that without stepping up to that next level ... It really does fit what you need to do on a daily basis.”

The Hatch model accounted for 15 percent of Cruze sales for Chevy in January. A slight increase in sales came from customers who turned in crossovers and pickups for the Hatch, according to Malcho.

But Ford Motor Co., which has traditionally dominated the market with hatch options on the Focus, saw small-hatchback sales fall 21 percent in 2016 as customers jumped to SUVs. It’s the company’s “hot” hatchbacks — the high-performance Fiesta ST, Focus ST and Focus RS — that grew by over 21 percent, according to Ford.

2017 Honda Civic Hatchback Sport Touring

“It’s not a hatch versus sedan story,” said Jeff Eggen, Ford’s small car marketing manager. “It’s a performance side... it’s really a source of strength for us right now, and it’s an area of small cars that is holding up well. This is a really unique area that an SUV can’t really deliver.”

Eggen said the slip in sales isn’t causing a panic, Focus hatchbacks continue to hold up well, but drivers — like those Hyundai hopes to reach with the Elantra — will seek out hatchbacks when they’re available in fast, fun models.

But Brinley said a successful hatchback can’t lean solely on performance models. The Elantra GT, for example, is available in the Sport trim or the stock engine. The Focus and Fiesta are both available as hatchbacks without the sport engines.

“Hot” hatches help improve the design’s image, but these vehicles hit a sweet spot below SUVs that really seems to be the primary selling point.

“The cars are just so much better than they were, and it’s no longer a penalty (to drive a hatchback),” Brinley said. “It’s taking a while, but people are starting to understand.”

Twitter: @Ian_Thibodeau