Station Wagons: Why They're Back

Station wagons are the high-waisted jeans of the automotive industry. Seldom cool looking, and reminiscent of long, hot family road trips during the summer months, station wagons are, today, best remembered for classic models such as the “Woody,” which featured wood paneling on the sides and sofa seats in the back, making the vehicle look like a traveling rec room. In the 1983 film “National Lampoon’s Vacation,” comedian Chevy Chase famously drove his family across America to Wally World in a version of the Woody called the “Family Truckster.” Jimmy Fallon just got his hands on a Woody for an opening bit in which he drove his "Tonight Show" family – Steve Higgins, two members of the Roots and Hashtag the Panda – to Universal Orlando for a week of shows from Florida. The producers called it "Orlando Vacation."

Fallon's homage to Chevy Chase aside, the station wagon has largely fallen into obscurity in recent decades – replaced by minivans and sport utility vehicles (SUVs). But now, this classic car is on the verge of a comeback. Many of the most forward-thinking car manufacturers are reviving the station wagon in hopes of attracting that most coveted of demographic groups: suburbanites.

Key Takeaways

  • After decades of declining popularity, station wagons are making a sudden comeback in the U.S.
  • Once classified as boring, bulky, and overly domestic, new wagon models offered by high-end car brands are challenging that hum-drum image.
  • As Millennials and Gen X' & Y'ers start having larger families, the station wagon is becoming a more attractive option that the mini van - and are more profitable for the automakers.

A Steady Decline

Sales of station wagons in the United States have been on a downward swing for more than a decade. In 2015, U.S. sales of station wagons accounted for just 1.1% of all automotive sales in the country, according to IHS Automotive. That works out to 188,959 station wagons sold that year, according to figures from market analysts JATO Dynamics. That figure is nearly identical to the number of station wagons sold in the U.S. back in 2000 – 190,101 units. Station wagons reached their sales peak in 1976 when U.S. sales stood at 972,212 and accounted for 10% of all vehicles sold in the U.S., data from JATO Dynamics shows. That same year, there were 62 station wagon models available to American car buyers. By 2004, there were just 26, including two from Ford, one from Chrysler and one from General Motors; by 2016, there were only eight, according to JATO’s classification data.

A Cult Following

Although station wagons have largely been usurped by SUVs and minivans in the new millennium, they have retained a loyal cult following among a certain segment of consumers. Today, there are dozens of station wagon fan clubs around the U.S., as well as websites devoted to the vehicles. The American Station Wagon Owners Association professes to be a club that “gives wagons of all kinds the love they deserve.” The association’s site publishes personal stories of people reflecting on their love affair with the station wagon, as well as dates for events where station wagon owners congregate to show off their vintage cars. This enduring following has led many automotive makers to feel that the time is right to mount a comeback for the station wagon.

Re-Launching the Wagon

What’s interesting about the wagon revival is the number of upscale automakers rushing back into this vehicle segment. This year, carmakers from Volvo to Porsche to Mercedes-Benz have been showing off station wagons at automotive shows around the world. Bloomberg News recently called the re-launch “a remarkable renaissance.” 

At the 2017 Geneva, Switzerland, car show, for example, Porsche (POAHY) unveiled its Panamera Sport Turismo station wagon, while Volvo (VLVLY) showed off a wagon version of its V90 sedan and Mercedes (DDAIF) garnered attention with its new AMG E63 S wagon. Other automotive nameplates planning to put out station wagons include BMW (BMWYY), Audi (AUDVF), Volkswagen (VLKAY), Fiat (FCAU) and Subaru (TYO).

Many of the new wagons are being designed and marketed to the luxury car segment – instead of faux-wood paneling and luggage roof racks, think leather interiors, state-of-the-art controls and optional sun roofs.And, of course, luxury car prices: The Mercedes AMG E63 S wagon has a starting price of $62,300, almost 20% more than the sedan version of the same car. 

A Desirable Demographic

Why the station wagon, and why now? Automotive executives claim that there is still a base of loyal buyers, who are attracted to state-of-the-art station wagons that have enough room in the trunk area for the luggage and family dog, but that also drive like a sports car and guarantee all the bells and whistles.

Dana Headrick, a product manager at Mercedes-Benz USA, recently told Bloomberg News that station wagon owners are among the best car buyers in the business as they tend to be more educated, affluent and loyal. “I almost liken them to the millionaire-next-door type of person,” he told Bloomberg News. Carmakers are also banking on a wave of SUV fatigue to help propel sales of station wagons – betting that buyers will turn to the station wagon as a more fuel-efficient option than the SUV, but still retaining ample roominess.

(Read Which Cars and Trucks Do Wealthy Americans Drive? for a surprise look at which cars are hot at the top of the market.)

Sound Economics

Of course, there are also sound economic reasons for automotive companies to revive and update the station wagon for the 21st century. This centers squarely on economies of scale.

With the additional room, car companies are typically able to charge 20% more for a wagon than for the sedan version of a vehicle. However, there is almost no added manufacturing cost. Aside from the different bodies, station wagon and sedan versions of a car model are virtually the same – same engine, controls, tires, features and interior. It’s just that with the station wagon, there’s an additional 20% markup on the price. This has led many automotive executives to forecast big margins on station wagon sales in the coming years. Even if station wagons sell fewer units than sedans, they can still prove profitable.

The Bottom Line

What’s old is often new again, and that is certainly the case with the beloved station wagon which is making a comeback in a sleeker, sharper luxury car format for the Millennial generation. And having grown up in minivans when they were kids, they may see station wagons as something new, with a cool retro kick.

(If replacing your car is in your future, check out our tutorial: The Complete Guide to Buying a New Car.)

Whether enough consumers embrace the station wagon renaissance remains to be seen. But a good number of automotive companies are betting that a tide of nostalgia, novelty and technology will propel sales of the station wagon to a new generation of families – and maybe folks tired of climbing up into SUVs.

(See also: Luxury Cars with High Resale Value.)