Every so often, Americans shift their vehicle preference – from fun sports cars to practical trucks to family-style sedans and more. Recently, small SUVs have made a big impact on the American market and in this article by The Washington Post, Steven Overly explains why:
“Americans love little big cars.
Crossovers or cross utilities, smaller SUVs built on car platforms, have become the most popular new vehicle on the road. Led by sales of the Honda CR-V and Toyota RAV4, they outsold every other type of automobile by a substantial margin last year, making up nearly a third of all new vehicle sales in 2016, according to WardsAuto.
Their tremendous growth in just the last decade propelled sales of new utility vehicles, large and small, ahead of cars for the first time in 2016. SUVs, trucks and vans now make up a combined 60 percent of new vehicle sales in the United States, and analysts and automakers project that share will rise in the years to come.
Many companies here at the North American International Auto Show are hoping to capitalize on this trend. Coming off a year of record sales, automakers want to offer fresh crossovers and other large-format vehicles to stay competitive.
“The outflow [of buyers] from the sedans into that crossover space is big and growing,” said Robert Davis, senior vice president of Mazda’s U.S. operations. “Of everybody that bought a car three years ago or five years ago, 50 percent of them are intending to buy a crossover” next time.
Nissan debuted the Rogue Sport, a more compact version of its top-selling Rogue crossover. GMC rolled out a slimmed-down version of the Terrain Denali. Mazda brought out the all-new CX-5 and Ford the EcoSport, both of which premiered at the L.A. Auto Show in November.
The crossover or cross utility concept may seem a bit nebulous from a consumer point of view: Most people would just call them SUVs. Built on a sedan carriage but with SUV features, they’re primarily known for handling like a smaller vehicle but offering a hatchback and fold-down seats for more cargo space.
After the recent financial downturn, sales of crossovers and SUVs took off at a quicker pace than for cars. Then in the last two years, Americans continued to buy more of every category of light trucks while car purchases declined.
Analysts and automakers say many crossovers on the market today are nearly as fuel efficient and easy to drive as cars, meaning customers make less of a sacrifice when they bulk up to bigger models. But they also tend to provide drivers with more height and cargo space, which makes them a better fit for families, baby boomers, and those who haul stuff.
“It’s not just about the gas prices. It’s much more about the versatility,” said Michelle Krebs, a senior analyst at Autotrader.
Joseph Hinrichs, president of the Americas for Ford, introduces Ford’s new F-150 at the auto show in Detroit on Jan. 9. (Scott Olson/Getty Images)
Larger SUVs and trucks are also gaining in popularity.
Ford has five SUVs in the works, including a revived Ford Bronco, which will come to market in 2020. The company also unveiled an all-new version of the F-150, the best-selling truck in the United States, and disclosed plans to bring the Ranger pickup back to the U.S. in 2019.
Among luxury automakers, Audi showed off a concept Q8 SUV, which is slated to hit showrooms in 2018. The new vehicle comes as SUVs now make up more than half of all luxury vehicle sales.
“Our customers strongly demand more models like this, SUVs that offer technology and luxury,” Dietmar Voggenreiter, Audi’s head of sales and marketing, told reporters here Jan. 9.
These larger vehicles also tend to carry a heftier price tag and pull in higher profit margins for automakers, presenting another reason the industry is so bullish about them. Some companies have shifted production of smaller vehicles to Mexico and other countries where labor is cheaper to bring down costs. That trend has caught the ire of President-elect Donald Trump, who has admonished automakers like Ford and GM over plans to build cars abroad.
Automakers aren’t going to stop making cars anytime soon. For one, small and midsize cars were still the second and third best-selling categories last year, data show, though both experienced declines year over year. An increasing share of the cars coming to market are also hybrid or electric vehicles, which have not been hot sellers thus far but required significant research and development dollars that companies will want to recoup.
“We’ve said we want to have a car portfolio, we need to have a car portfolio,” said Joseph Hinrichs, Ford’s president of the Americas. “But do you need one in every segment? That’s something we’ll discuss and look at over time.”
Even Toyota defended the future of cars and acknowledged the popularity of bigger vehicles. On Jan. 9, the company lifted the veil on the new Camry, the best-selling sedan in America for the last 15 years.
“Why should SUVs get all the glory?” President Akio Toyoda said here. “After all, this segment is still one of the largest in the industry, and the Camry is a huge part of our manufacturing here in the U.S.”
