What is the major problem of Toyota Avalon?
The major problem facing the Toyota Avalon in recent years has been shrinking demand for large sedans as buyers migrate to SUVs and crossovers, which contributed to its discontinuation in the U.S. after the 2022 model year.
From its debut in 1994, the Avalon represented Toyota’s flagship sedan option in North America—offering a spacious, comfortable ride. Yet evolving consumer preferences and Toyota’s strategic focus on more popular segments have left the Avalon increasingly out of step with the market.
Market forces reshaping the Avalon
Here is a snapshot of the market dynamics that have pressured Avalon’s fortunes:
Demand patterns
The shift from passenger cars to crossovers has reduced buyer appetite for full-size sedans like the Avalon.
- Sales of large sedans have declined as SUVs and crossovers dominate showroom floors.
- Consumers increasingly seek interior versatility, higher driving position, and similar space in a crossover, often at a similar or lower total cost of ownership.
- Toyota and other automakers have prioritized SUVs and trucks in product planning, shifting resources away from full-size sedans.
- Competition from other brands offering feature-rich, spacious sedans alongside strong SUV options has intensified.
Overall, these trends eroded Avalon's mainstream appeal and market share, contributing to its discontinuation in the U.S. after the 2022 model year.
Company response and current lineup
To adapt to a market that favors SUVs, Toyota redirected emphasis toward crossover models, including a dedicated three-row option intended to fill the space Avalon's buyers used to occupy.
Grand Highlander as a replacement
The Grand Highlander, introduced for the 2024 model year, expands Toyota’s three-row crossover family and serves as the closest replacement for Avalon’s family-friendly, roomy-sedan niche in a crossover format.
- Launched to cater to buyers who want substantial interior space with the practicality of a SUV.
- Offers Hybrid and gasoline powertrains, with modern technology and safety features.
- Represents Toyota’s strategic pivot away from large sedans toward high-demand crossover segments.
In the U.S., the Avalon was discontinued after the 2022 model year as Toyota shifted its lineup toward crossovers, with the Camry remaining the core sedan option for customers who prefer a traditional car.
What buyers should know
For prospective buyers today, the Avalon’s status translates into several practical considerations:
- New Avalon is no longer sold in the U.S.; if you encounter one, it will be a used model from prior years.
- Reliability in Avalon’s traditional role remains solid for many owners, consistent with Toyota’s reputation for durable sedans.
- For new purchases, Toyota directs buyers toward the Grand Highlander for space and practicality, or the Camry for a traditional sedan experience.
These dynamics mean buyers who want a new, spacious, comfortable Toyota have a clear choice between the Grand Highlander and the Camry, while used Avalon models can still offer a familiar experience for a portion of buyers seeking a legacy Toyota sedan.
Summary
The major problem facing the Toyota Avalon is not a defect or safety issue, but a structural market shift away from large sedans toward SUVs and crossovers. This shift eroded demand for the Avalon, prompting Toyota to discontinue it in the U.S. after 2022 and to refocus the lineup around popular crossover models like the Grand Highlander. For buyers, the decision now centers on whether a used Avalon remains an appealing, reliable option or whether to pursue a modern SUV such as the Grand Highlander or a more traditional sedan like the Camry, depending on space, budget, and lifestyle needs.
