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The brutal battle of the world's most boring cars

The 2016 Kia Optima is the next generation

The 2016 Kia Optima is the next generation of the South Korean automaker's midsize sedan and its bestselling vehicle. Credit: Kia

Car manufacturers have their work cut out for them at the annual New York International Auto Show this week. They are tasked with quickening pulses, but the big reveals – the new models that car companies want drivers to lust after – are a pretty humdrum bunch.

It’s the spring of the milquetoast, mid-sized sedan. Chevrolet will pull the slip off its new Malibu. Kia is unveiling its latest Optima. And Nissan is rolling out an updated Maxima. Details are still scarce, but rest assured they will all be perfectly fine-looking, well-appointed and thoroughly boring. If they were on Tinder, you would swipe right and immediately regret it, especially if you are standing near any of the supercar supermodels.

It wasn’t always this way of course. There was a time when sedans were the car market and options meant buying a convertible. But vehicles now come in a range of shapes and sizes, from massive SUVs, to appliance-sized pods and all kinds of odd things in between (see: Nissan Juke).

Trucks, SUVs and so-called crossover SUVs have become by far the fastest growing segments. Not only are those the vehicles drivers want, but they give car companies a way to stand out from the pack because designers have more car to work with.

Bloomberg Intelligence analyst Kevin Tynan expects a long, slow swoon in the sedan market. “Over time, you’re going to see this demand migrate over to mid-sized SUVs,” he explained. “It’s just kind of starting now.”

Practicality, however, is a powerful thing. The mid-sized sedan still suits the needs of a wide swath of drivers. It isn’t too big or too small, too inefficient or too unsafe. It’s the most median of products – the most car-ish of cars. That is why the segment still accounts for one in seven vehicle purchases in the U.S. and the segment is still growing at roughly the same pace as the car market overall.

It’s also why every company in the business still feels the need to make one. Drivers in North America these days have almost 20 mid-sized sedans to choose from. “The new Malibu is for Chevrolet, honestly, an extremely important business case,” said General Motors spokesman Chad Lyons. “We’ve been working hard on this car for years and we’re doing whatever it takes to win.”

All of that competition, however, makes for a brutal business. To stand out, companies need to either pack their sedans with more features or cut prices; neither path is a good route for making money. “Now, it’s a price of entry,” said Jeff Schuster, senior vice president of forceasting at LMC Automotive.  “There’s not a lot of growth potential, but if you’re going to be a full, lineup brand, you need to be in this segment.”

With an engine that makes 300 horsepower, Nissan is playing up sportiness in its 2016 Maxima.

The features on a standard mid-sized sedan these days used to be solely the trimmings of Audis and BMWs. Leather is ubiquitous, as are top-of-the-line navigation systems and vanguard safety measures like automatic braking and sensors to keep a vehicle from drifting out of a lane.

Pierre Loing, Nissan’s vice president of product planning in North America, said the Maxima will even draw a small slice of buyers who are also considering BMW’s 3-series or Acura’s TLX.

"There really are no bad cars in the segment anymore," he said. 

The new Malibu, meanwhile, will have a tech package aimed at teen drivers. Parents can program one of the car’s key fobs to track driving metrics and encourage safe practices (the stereo, for example, won’t play unless the seat belt is fastened).

Nissan, meanwhile, also made a play for parents in a February Super Bowl ad teasing its new Maxima.

But software engineers and Big Game commercials don’t come cheap. Not surprisingly, mid-sized sedans offer some of the most paltry profit margins in the business. Last year, U.S. dealerships made an average of just $293 per vehicle. Meanwhile, profit on a big pickup was slightly more than double that amount and a large SUV like Cadillac’s Escalade added almost $900 to the bottom line.

It’s an arms race of sorts and no matter how many expensive features companies bolt on, none of them can catch longtime market leaders Honda, with its Accord, and Toyota with its Camry. Of the sedans the world will see this week, Chevrolet’s will be most closely watched. For burgeoning brands like Kia and Nissan, any uptick in market share is a bonus. However, Chevy is a high-volume player that has for years failed to win its share of a high-volume segment. Hyundai’s Sonata passed the Malibu in U.S. sales in 2011. Ford’s Fusion remains far ahead and Kia’s Optima is closing fast. 

All of that is in terms of sales volume, of course. When it comes to profit, no company really wins. It’s a terrible time to be in the business of selling mid-sized sedans. The flip-side, of course, is that it’s a great time to buy one. A driver who doesn’t need a carbon-fiber chassis, an engine with “launch control” or a car that will make the neighbors jealous gets a lot for their money these days. And while the new crop of mid- sized sedans isn’t sexy, they are wrapped tightly in leather. Just close your eyes and picture a Mercedes.

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