Consumers SUV craze shows no signs of slowing as more carmakers join in
FOR MOREF consumers, the decision to buy a new car quickly becomes a choice to buy some kind of sport utility vehicle.
As this year’s Los Angeles Auto Show demonstrates, automakers are rushing to feed that demand, especially given signs that industry-wide US sales are peaking.
Alfa Romeo revealed its firstever SUV, the sleek Stelvio, while Jaguar introduced an electric I-Pace concept. Mini pumped up its Countryman crossover, while Ford is bringing its EcoSport to the US Mazda has a new CX5, and Volkswagen showed the seven- seat Atlas conceived to woo American shoppers.
The onslaught of SUVs – typically big profit generators – should help insulate the automakers from next year’s predicted decline in US vehicle sales. Light trucks, which include SUVs, pickups and vans, climbed to 59 per cent of US sales this year through October from 55 per cent a year earlier, according to researcher Autodata Corp. In an era of low fuel prices, much of the gain has been from new SUV models, and the shift shows no sign of ending.
“We don’t know what the ceiling for SUVs is,” Dietmar Exler, who runs MercedesBenz sales operations in North America, said last Tuesday at a conference. “Is it 60 per cent? 65? We don’t know.”
SUVs are the overwhelming choice when consumers switch from one class of vehicle to another, including almost a third of everybody who trades in a car, according to Edmunds.com. The trade- off suits both sides: Consumers get more storage and a more elevated view, while automakers earn more profit from SUVs than sedans.
And once someone buys an SUV, they tend to buy another. This year, 72 per cent of people trading in a sport utility decided to stick with that vehicle class – considerably higher than car loyalty at 62 per cent and very close to pickup loyalty at 74 per cent, said Edmunds.com senior analyst Jeremy Acevedo.
SUVs started out as truckbased, body- on-frame vehicles from big Chevy Suburbans to classic Jeep Wranglers to O. J. Simpson’s infamous Ford Bronco. Since the emergence in the 1990s of car-based “cute utes” like the Honda CR-V and Toyota RAV4, there’s been a proliferation of offerings across sizes, prices and powertrains.
They are making their popularity felt even in Los Angeles, as California pushes ahead with its US-leading crackdown on fuel efficiency in part because of the proliferation of SUVs and pickups. Automakers already are responding with battery-powered SUVs such as Tesla’s Model X, which debuted in September 2015, and Jaguar’s I-Pace, slated for production in 2018.
Broadly defined, sport utilities and crossovers have outsold all sedans since the second half of 2014, said Tom Libby, an analyst at IHS Markit.
SUVs are “taking share from every body type except pickups,” Libby said. Pickups are basically holding steady because of they’re more rugged and have unique capabilities that make them suitable for work. Mini’s redesigned Countryman SUV – eight inches ( 20 centimetres) longer than its previous iteration – has a navigation and entertainment system adapted from BMW’s 7 Series, restyled to fit the smaller brand’s image. The biggest Mini will also be available as a plug-in hybrid by mid-2017. With all-wheel drive, British styling and go-kart handling, it provides a unique take on the popular segment, said Ralph Mahler, the brand’s vice president for product management.
The Countryman has “all- day functionality,” Mahler said. “I think that’s the combination of why the segment is also growing and why we have so many customers going for SUVs.”
Though SUVs may seem typically American, their popularity is global and they gaining share across Europe and China. By the end of this year, SUVs and crossovers will probably catch up with cars world-wide, said Finbar McFall, Jaguar Land Rover’s head of product marketing. The company’s Jaguar I-Pace is the brand’s first electric model and second SUV.
“Once you’ve experienced an SUV, for many people, it’s a oneway valve,” McFall said. — WPBloomberg