SUVs grow, adding profit and space
Cheap fuel keeps public in market for larger vehicles
Just when you thought sport-utility vehicles couldn’t get any bigger, they are.
Two of the auto industry’s most hulking SUVs, the Chevrolet Tahoe and Chevrolet Suburban, are growing in size for the 2021 model year.
For customers, that means more headroom, more legroom and more space for hauling.
For automakers, that means more profits because large SUVs are among the industry’s biggest moneymakers, rivaled only by full-size pickups, which also are getting bigger.
Other SUVs, like the Toyota Highlander and the Ford Expedition, have been getting longer and larger, too.
“Size creep,” is how Stephanie Brinley, principal automotive analyst at re
search firm IHS Markit, describes it.
“When you go out and do clinics on almost any vehicle and you ask what people want, they almost always say they want more space,” Brinley said.
The trend comes as the nation’s SUV boom continues. Steadily low gasoline prices are providing Americans with confidence that they won’t get stuck with gas guzzlers during a sudden spike in fuel prices.
No pain at the pump
The national average price of gas hasn’t topped $3 since 2014, according to the U.S. Energy Information Administration. That reality, coupled with the rock-bottom unemployment rate and record stock prices, has benefited SUV sales.
It also doesn’t hurt that SUV gas mileage has improved.
Among all SUVs, 28 vehicles in the 2020 model year get at least 30 mpg in combined city-highway driving, compared with only one model in 2000, according to the Environmental Protection Agency.
“With low gas prices, nobody cares how big they are really, and the fuel economy has improved, too,” said Michelle Krebs, executive analyst at carbuying site Autotrader.
Another factor driving the trend: Americans are getting older, and SUVs generally are easier to climb into than passenger cars, analysts say.
That’s one reason why GM, Ford and Fiat Chrysler have discontinued most of their passenger cars, such as the Chevrolet Cruze, Ford Focus and Chrysler 200, while sales of other cars that were once stalwarts have plummeted.
In 2019, about half of new-vehicle sales in the U.S. will have been SUVs, according to projections by car-research site Edmunds. Passenger cars will represent about one-third of those sales, while pickups should compose the rest.
To capitalize on the boom, automakers have been introducing more SUV models, including three-row options from Subaru, Hyundai, Kia and Volkswagen for the first time.
Tahoe grows 18 inches
To keep customers buying its big SUVs, GM announced this month that it had stretched the Tahoe and Suburban SUVs. The 2021 Tahoe is 6.7 inches longer than the 2020 model, a huge leap in an industry in which one or two inches can make a visual difference.
That extra size has increased the vehicle’s maximum cargo room by 29.8%.
It’s the latest in a series of increases. From the 1999 model to the 2021 model, GM added 17.7 inches in length to the Tahoe.
Ford has added 11 inches to the length of its Tahoe rival, the Ford Expedition SUV, since 1999, according to Edmunds.
There are dollar signs behind the increases. The average full-size SUV sold for $67,681 from June through November, compared with $36,856 for the average full-size car, according to Cox Automotive, which owns Kelley Blue Book and Autotrader. The average midsize SUV sold for $39,278 during the same period, compared with $26,244 for the average midsize car.
“As the competitors grow in size, they want to make sure they protect this cash cow that they’ve got here,” Edmunds analyst Jessica Caldwell said of GM.
A bigger midsize
The size race is not limited to the traditional Detroit Three automakers.
The Toyota Highlander has added 10.9 inches in length since its debut in 2001, including adding a third row.
And it’s not just the industry’s biggest SUVs adding size. The Toyota RAV4 midsize SUV has added 14 inches to its wheelbase from 1999 to 2019.
“People are willing to pay more for bigger vehicles,” Caldwell said.