Why ride close to the earth’s mortals when you can coast above the fray? U.S. auto consumers have officially made sport utility vehicles (SUVs) and crossover utility vehicles (CUVs) the top segment in the industry, edging out sedans for the first time in American market share, according to IHS Automotive analysis of Polk registration data. Behind the takeover is a desire for more space, added height, extra towing muscle, and other factors that involve the word “more.” Pickup trucks and hatchbacks join the sedan on the list of declining segments.
The SUV explosion
While every other auto segment held steady or showed slight decline in the Polk data, SUV and crosssover sales gained 2.6 percent through May 2014, allowing the larger vehicles to surpass sedans for the first time in history. IHS Automotive’s Tom Libby said pointed to the “higher seating position” and “higher ground clearance” as well as increased off-road and towing capability as the reasons for the uptick in SUV and CUV market share.
A look at new industry releases suggests automakers are focusing on this segment more than ever. Between the GM 2015 SUV releases, crossovers by Porsche (POAHY.PK), and the new Jeep lineup, it’s clear where the battle is being waged. In fact, it shouldn’t surprise anyone that the second mass-market offering by Tesla Motors is a crossover utility vehicle set to go on sale in 2015. Even the electric vehicle consumer wants more.
Fuel prices and pickup declines
IHS Automotive’s Chris Hopson suggested pickup sales, which lost 0.5 percent market share through May 2014, could be dented even further in the long-term by higher oil prices and increasing fuel efficiency standards. In the short-term, SUV consumers seem convinced gas prices will stay reasonable. Other consumers are opting for smaller, more efficient utility vehicles to hedge their bets.
Between the Honda CR-V with its 31 highway mpg, the Ford Escape with 32 mpg highway, and GM’s Chevy Equinox with 32 mpg highway, three smaller crossovers are selling in the U.S. top 15 in 2014. By opting for the more petite models in the segment, consumers get some of the benefits of the vehicle category without sacrificing much in fuel economy when compared to sedans.
Sales of the Toyota 4Runner, which were up 42 percent in June, and the Chevy Tahoe (up 93 percent for GM in June), suggest U.S. consumers are not shying away from the bigger models, either. Hopson of IHS Automotive said that trend may reflect a belief in the short-term decline of fuel prices.
It may be that same predicition that is dinging sedan sales, which dropped the most of any segment at 1.2 percent to the negative in 2014 market share through May. Pickups and hatchbacks each lost 0.5 percent, but new offerings in these categories are increasingly rare. For now, crossovers and larger SUVs are all the rage. Automakers are delivering their new products accordingly.