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SUVs Are Conquering US And Europe, But How Long Will They Reign

The past year saw record car sales on both sides of the Atlantic and a huge jump in demand for crossovers and SUVs in particular, to the point where they account for over 40% of US car sales and 25% of European sales. But even with unprecedented levels of demand, not all consumers are sold on the idea of owning an SUV.

Of the 17.5 million vehicles sold in America over the last 12 months, 6.7 million were crossovers or SUVs and 2.7 million pickups.

And as sales of 4x4s increases, all other vehicle types have started sliding in popularity. Sales of large cars have plummeted 44.7% in the US over the course of 2016 while sales of large SUVs have jumped 21.6%.

Honda has sold 357,335 CR-V crossovers, Nissan 329,904 Rouges, and Toyota 352,139 RAV4 models. To put those figures into perspective, America’s most popular car, the Toyota Camry, managed 388,616 sales, and while it’s still ahead of the chasing crossover pack, it has seen sales fall 9% over the past 12 months, while Nissan has seen a 14.9% spike in demand for the Rogue.

According to J.D. Power, it’s taken five years for the SUV and crossover to move from a 34% to a 42% market share. “Low fuel prices, favorable lease deals and the availability of low-interest loans are attracting buyers to SUVs,” said Dave Sargent, vice president of global automotive at J.D. Power.

And the crossover craze is now sweeping through Europe too. For the first time, high-sided vehicles accounted for one in every four cars sold on the continent in 2016. JATO Dynamics says that registrations of these types of cars grew by 21.4% over 2016 — a year where car sales were at their highest across all sectors for nearly a decade.

“[It] was a great year for the industry, with the second highest volume of registrations since 2007. European car registrations have shown good momentum, with 27 out of 29 markets in Europe recording positive growth last year,” said Felipe Munoz, JATO’s Global Automotive Analyst.

Over the next 12 months, car companies will be betting even more on the persuasive powers of the SUV with new models coming from Audi, BMW, Chevrolet, Mercedes-Benz Nissan, and Volkswagen among others.

However, J.D. Power notes that the majority of US car shoppers are actively trying to resist the lure of SUVs. Just 24% of the 27,500 car owners who took part in its most recent Auto Avoider Study said that they went out to buy a new SUV rather than any other type of car.

“Since consumers, on average, pay a 9% premium for an SUV compared with a comparably equipped sedan, many consumers still are not considering an SUV,” said Sargent.

What’s more, in US car-buying circles, SUVs struggle to build the same levels of loyalty that other vehicle types achieve — 38% of SUV owners are new to the vehicle’s maker.
AFP