Toyota and Honda Increase Their Compact SUV Dominance
Toyota and Honda lead the compact SUV class thanks to their ever-popular RAV4 and CR-V. They dominated with 28.38% of the segment at the end of Q2 2023. Though the RAV4 is slipping in year-to-date (YTD) sales by about 7%, that hardly detracts from its impressive 16% of the market share. It’s an irrefutable best-seller, but the drop in sales shows Toyota is not immune to supply chain issues and competition.
The mainstream compact SUV brands have accounted for over 1.2 million sales YTD. With that much market share, the RAV4 and CR-V have the most significant impact on the auto industry.
Why are Toyota RAV4 sales declining?
Three Toyota models have declining sales this year. Joining the RAV4 are the Corolla compact sedan and Highlander midsize SUV. Blaming a supply shortage for these sales drops is easy, but that’s not the only factor.
Increased competition is also to blame for the RAV4 sales decline. Models like the new Ford Bronco, Bronco Sport, and Nissan Rogue are making waves in the compact SUV market. The Rogue is a tight competitor with the RAV4 and the CR-V, and it has seen 68.51% growth YTD and nearly matched sales with 147,745 vehicles sold YTD through June, Ford Authority reports.
Though supply chain issues still affect Toyota RAV4 sales, this appears to have only opened the window for the competition. The two factors are apparent culprits in the sales decline. Toyota is likely hoping the decrease is only a blip, but it has some leeway for sales slippage with its large market share.
What’s driving Toyota and Honda’s combined market share increase?
Consumers who don’t have a preference between Toyota and Honda likely see the same vehicle in the RAV4 and CR-V. These compact SUVs have similar features, fuel economy, and warranties. They’re also highly reliable and safe.
In addition to all those benefits, the RAV4 and CR-V are competitively priced. And these dependable SUVs don’t cost much for the average person to drive, even on long road trips.
Is a storm brewing for compact SUV makers?
While the dominance of Toyota and Honda compact SUVs is substantial and long-term, all car manufacturers seem to be bracing for the unknown. The auto workers’ strike, persisting supply chain problems, and rising interest rates could spell trouble for carmakers looking to maintain profits.
Some observers believe the time to buy a vehicle is now, before the occurrence of any looming disasters makes purchasing a new car difficult. That could be why some automakers are experiencing sales increases, and Toyota and Honda continue to ride high at the top of the market.
Others believe supply chain issues will continue to improve and post-pandemic economic recovery is underway. If that’s the case, the RAV4 and CR-V are cementing their superiority in the compact SUV market. That likely won’t lower their prices anytime soon.
The 2023 Toyota RAV4 starts at $28,275, and the 2023 CR-V starts at $28,410. They’re very similar in price and function, providing the features most Americans want in a small SUV.