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1990s. Back then, they were disparaged as “cute-utes,” lacking the power and prestige of the big, testosterone-fueled Hummers and Navigators Detroit was churning out.
Today, much like flip phones begat smartphones, cute-utes have morphed into stylish models packed with the latest safety and infotainment technology. “The compact SUV is very similar to a midsize car, only taller with more flexible cargo capacity,” says Jessica Caldwell, a senior analyst for Edmunds.com.
Compact SUVS owe a debt to the humble minivan. The rise of those sliding door-equipped behemoths three decades ago showed there was a better way to haul kids and their gear to school and soccer games than just cramming everybody into the back seat of a Ford Taurus. But for all their utility and respectable fuel efficiency, minivans were saddled with a dowdy mom-mobile image that prevented them from overtaking traditional family sedans. Annual sales of minivans have fallen by half over the past 10 years. Today, compact Suvs—seen as more of a cool kids’ conveyance—outsell minivans more than 6 to 1.
Safety also is a factor. Craig Sollman, who works at the local water utility in Greenville, says his wife feels more secure in their RAV4 because she rides above traffic. “People feel safer when they are up higher and have a better view of the road,” says Edmunds.com’s Caldwell. “Whether it’s true or not, that doesn’t matter, because that’s the perception.”
In this case, reality does match perception: Small SUVS have a rate of 23 driver deaths per 1 million vehicles, compared with 35 for midsize cars, according to an analysis of federal crash data by the Insurance Institute for Highway Safety.
The SUVS have a weight advantage, “and more weight is protective in crashes,” says Russ Rader, a spokesman at the IIHS. “There’s also a safety advantage in sitting up higher in the vehicle because that puts a driver a little above the point of impact in crashes.”
These attributes have given compact SUVS cross- generational appeal. Baby boomers, who spurred the SUV craze a quarter-century ago, are moving down from big rigs such as Ford Motor’s Explorer and Toyota’s Highlander into the smaller models as their children leave the nest. Meanwhile, those children, who “grew up in SUVS,” are choosing them as they enter their baby- on-board years, says Bob Carter, Toyota’s top U.S. sales executive. “The under-35 millennials are buying ’em up,” he says.
To help meet demand, Toyota began importing RAV4S to the U.S. from Japan last year, supplementing the automaker’s Canadian factory, which has been operating full tilt. Sales of the model jumped 18 percent in 2015, to 315,412 vehicles, pushing it past Ford’s Escape to become America’s secondbest- selling compact SUV. Carter predicts that within five years the RAV4 will surpass the Camry, which has been the top-selling car in the U. S. for the past 14 years. Honda’s CR-V remains the No. 1 compact SUV, with 2015 sales totaling 345,647. It came within 10,000 of topping the Accord sedan, which finished second to the Camry.
Low gasoline prices of about $2 a gallon have helped fuel the latest run on Suvs—and are even encouraging a revival in compact pickups. But analysts say small sport-utes won’t need cheap gas to sustain sales. Accidentavoidance gizmos, electronic liftgates, fancy sound systems, and Web and text capabilities coveted by connected consumers have made small SUVS far more customer-friendly than the utilitarian trucks that inspired their creation.
“Improvements over the last 5 to 10 years have been remarkable,” LMC’S Schuster says. “There isn’t a big difference now between similarly sized sedans and SUVS.”
Smaller SUVS also have shed their rough-and-ready looks for swoopy styling that borrows more from the sedans they’re replacing than the off-roaders they once aspired to be. “We’ve moved beyond the boxy, small SUV,” says Mark Wakefield, managing director and head of the Americas automotive group at consultant Alixpartners. “It has evolved into a tall car that drives like a car and has almost no sacrifices.”
“Improvements over the last 5 to 10 years have been remarkable. There isn’t a big difference now between similarly sized sedans and SUVS.” ——Jeff Schuster, LMC Automotive Working Title stays quirky in an age of blockbusters
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24 The bottom line Demand for small SUVS is fast eclipsing that for family sedans, which had been America’s most popular car type since the ’50s.