SUVs had a lasting impact on the automotive industry when they hit the market full force during the 1990s, particularly in regards to the idea of a traditional family vehicle. With a design legacy rooted in the military, SUVs provided power, off-road capability, ample seating, high ground clearance, and an excellent point of view from the driver’s seat. They offered the comfort and space of a minivan or wagon, but with more style and utility. Consumers immediately loved them, providing big profits for manufacturers. Unfortunately, the economic recession quickly settled in, gas prices skyrocketed, and government regulations became stricter. This caused the industry to pull away from big gas-guzzling SUVs and devote R&D funds to more affordable alternatives. Enter the crossover!
Crossover Into New Territory
The concept is nothing new, nor is it the design-baby of US manufacturers. Russia was popularizing compact SUVs back in the 1970s—the VAZ-2121 Lada Niva. But the crossover’s smaller size, smoother ride, lower price, and better fuel efficiency made it a no-brainer solution. Part passenger vehicle, part SUV, the crossover represents a vague and varied segment. A USA Today article from 2006 reported that CUVs “made up more than 50% of the overall SUV market” and that 53% of all SUV sales that April were made up of crossovers.
Fast forward 10 years and it seems not much has changed. “Just five years ago, about one in four GM sales were crossovers. Today, they account for almost one-third of our deliveries and we see more growth ahead” said Kurt McNeil, U.S. Vice President of Sales Operations at GM. And as the economy seems to slowly recover, and gas prices stay in an affordable range, automakers are scrambling to produce a new and diverse selection of utility vehicles. Even including a return in popularity of the full-size SUV.
Current numbers show that SUV and CUV sales, as well as their accompanying aftermarket accessories, rank high on the growth chart throughout 2016 and into 2017. And that trend seems set to continue its climb. Sales data shows a shift away from ‘traditional’ cars to this segment. Drivers are “taking advantage of comparable size, safety, and fuel economy,” said Nick Geiger, Category Manager at Keystone Automotive Operations, Inc. “The SUV and crossover business continues to excel due to the continuous changes these companies have made during the past few years. And it aligns them just right to target a broader consumer market,” continued Geiger.
And boy do they have some big marketing initiatives planned for the next few years. The all-new 2017 Nissan Rogue Sport, Volkswagen Atlas, and Mazda CX-5 are all the buzz. Ford revamped its Explorer and Escape platforms, equipped with updated trims and upgraded tech. The company plans to nearly double its SUV/CUV program in the US by 2020, even enticing consumers with a return of the legendary Bronco.
Toyota and GM aim to replace 85 and 84 percent, respectively, of their lineups by 2021. Restyling is slated for the RAV4, 4Runner, Highlander, and Land Cruiser, as well as an expanded Cadillac lineup and the return of the Chevy Blazer. Fiat Chrysler will continue to capitalize on the Wrangler’s success with an update for 2018 and a Jeep® pickup slated for 2019. Also planned is a new Cherokee and a fancy revival of the Jeep® Wagoneer.
Hyundai recently revealed major plans to expand its few SUV options into a full suite debuting with a small CUV, the Kona, for 2018. And even some uber-luxurious brands like Rolls Royce and Lamborghini are looking to elbow in to the market with the Cullinan and Urus models.
Evolve or Dissolve
Motor Trend reports that over the next four years, the industry will average roughly “57 vehicle launches a year, with 35 percent of those being crossovers.” They state that an already ‘crowded’ segment is “poised to grow from 78 nameplates now to 110 by 2021, making the space even more competitive.” Are OEM’s taking some marketing cues from Netflix’s playbook to offer something for everyone? (What kind of crossover would they recommend for the woman who loves 1950s screwball comedies? Or the guy who binges Dr. Who reruns on the weekends?)
Okay, so the industry might not be aiming for that much specificity among consumers, but they do seem to have a type. Namely, millennials and drivers over the age of fifty. While these two groups seem like they couldn’t have less in common, they’re more alike than either Grandma or young cousin Ricky would care to admit.
Modern SUVs, and particularly crossovers, offer respectable fuel efficiency and a low starting price. This greatly appeals to seniors on a fixed income, as well as millennial drivers up to their eyeballs in school debt. The designs of these vehicles are, on the whole, attractive, with some models showcasing a little more individuality (think the Jeep® Renegade, Nissan Juke, and Fiat 500x). They’re functional and practical, with a handful of utility and a dash of sportiness or spunk mixed in. And while the infotainment options and WiFi capabilities might be overwhelming for some owners who can hark back to pre-seatbelt days, older drivers in general seem to appreciate the upgrades in safety technology that many of these models have to offer.
What’s more, as many older millennials begin to settle down and have kids, they need a vehicle that can multitask. Crossovers and SUVS offer a roomy and comfortable interior, with multiple storage options, and flexible seating. (And without the stigma of having settled into the dreaded minivan.)
So, what does this mean for aftermarket professionals interested in a slice of the pie? And where exactly is this new market trend heading? Check back for Part 2 of our examination of the swelling SUV/CUV market. And don’t forget to weigh in on the comment thread. Tell us how you feel about these styles and where you see their popularity going.