SUVs And Crossovers Will Outsell Cars In America, But When?

Timothy Cain
by Timothy Cain

Canadians purchased and leased nearly 43,000 SUVs and crossovers in January 2016. At the same time, fewer than 34,000 passenger cars made their ways to Canadian driveways.

This wasn’t an anomaly. Canadians also registered more utility vehicles than cars in January 2015, and over the course of 2015, only 2 percent more cars were sold than utilities, a margin of only 14,000 sales.

No, it wasn’t an anomaly, but the gap in demand was exceptional. For every passenger car acquired by a consumer, business, fleet, or governmental agency, the industry also recorded 1.3 SUV/crossover sales.

How soon before the U.S. auto industry makes the same claim? In January, as car volume plunged 9 percent and utility vehicle sales jumped 6 percent — despite an abbreviated sales month and an overall volume decrease — cars outsold utilities by just 1.1-to-1. That’s down from a 1.25-to-1 gap a year ago.

In other words, it’s about to happen.

CORRELATIONS


The rise of utility vehicles in Canada serves to befuddle observers who were previously under the impression that the market bore more resemblance to Europe’s than America’s. But for a far greater example of North American similarities, consider pickups: As a percentage of the market, pickup trucks are a far greater force north of the border, earning 22.7 percent market share during a particularly strong January, fully eight percentage points greater than pickup truck market share in America. Furthermore, full-size pickups generate measurably more truck market share in Canada than in the United States.

Canada’s historic small vehicle tendencies are seen in the SUV/CUV sector, however. Full-size body-on-frame SUVs such as the Chevrolet Tahoe and Ford Expedition produce less than 2 percent of the Canadian utility vehicle market, compared with 5 percent in the U.S.

Meanwhile, the new breed of subcompact crossovers owned nearly one full percentage point of additional market share in Canada than in the U.S. last year. U.S. sales of the supply-constrained Honda HR-V, for instance, weren’t even five times stronger than those on the Canadian side of the border. In contrast, the U.S. auto industry is nine times the size of Canada’s.

Yet the list of best sellers is largely filled by the same players: Escape, CR-V, RAV4, Rogue — five crossovers which earned more than a fifth of Canada’s utility vehicle sales in January; just under a fifth of the American utility vehicle sector’s sales.

DEFINITIONS


Vehicles such as the aforementioned HR-V, the low-slung Mazda CX-3, the obviously Impreza-on-stilts Subaru Crosstrek, and the upcoming tall wagon Kia Niro hybrid apply great strain to the border control agents who wish to define utility vehicles as ladder-framed, off-roadable ess-you-vees with low range levers and knobby tires.

Based on the results produced by the Canadian auto industry last month, even excluding a large number of least-like-an-SUV candidates wouldn’t have dramatically altered the results. Even after switching the ten-member subcompact crossover category into the car grouping, utility vehicles would still have outsold cars. Throw the Subaru Outback and Toyota Venza back to the car sector and SUVs/CUVs would still have outsold cars.

The application of more rigid definitions won’t alter the trend line. And it’s likely time we accepted that just as a multitude of different vehicle types fall under the “car” banner – from the Mazda MX-5 Miata to the Mercedes-Benz S-Class – so too shall the SUV/crossover zone include a number of regions. There’ll be two-door convertibles akin to the Range Rover Evoque, front-wheel-drivers like the Fiat 500X, Rubicon-worthy Jeep Wranglers, the track-worthy BMW X6M rivals, and traditional family wagons which now operate not as the Ford Country Squire or Chevrolet Bel Air Nomad but as the Ford Flex and Chevrolet Traverse.

MAIN MOTIVATORS


If, or rather when, SUVs and crossovers overtake passenger cars in the United States, vehicles from all of those categories will be key factors behind the surge. In 2015, nameplates as disparate as the Chevrolet Trax, Lexus NX, Nissan Rogue, and Volvo XC90 added 200,000 sales to the SUV category’s ledger. (The Honda Accord, Chevrolet Cruze, Ford Focus, and Chevrolet Impala brought car volume down by 120,000 sales.)

2015 calendar year sales in the Honda CR-V’s small SUV segment increased 13 percent, subcompact crossover volume nearly doubled, America’s six best-selling three-row utility vehicles jumped 15 percent, and premium auto brands reported a 21-percent increase in utility vehicle sales.

Over the first half of 2015, SUV and crossover sales were expanding rapidly with average monthly market share of better than 35 percent. Since Independence Day, the average monthly market share for the sector shot up to 38 percent.

OUTCOMES


As the Dodge Dart was launching, Fiat Chrysler boss Sergio Marchionne told 60 Minutes, “If you’re a serious carmaker and you can’t make it in this segment, you’re doomed.” Fast forward to early 2016 and we now know that FCA doesn’t want to develop a new compact car, is overrun with 200 inventory, and relies on Jeep for the bulk of the automaker’s growth.

Laugh at FCA for believing low fuel prices are a permanent fixture if you must, but healthy SUV and crossover volume is the prevailing certainty. “New technology has allowed small crossovers to get real world fuel economy that is on par with midsize sedans,” AutoPacific’s Dave Sullivan says. “The difference is not enough that people’s checking accounts would notice.”

The move away from larger utility vehicles, if there is such a move, won’t be back to sedans. “Fuel prices eventually will go up, but if it happens to that extent, we think people will shift to smaller SUVs, not away from SUVs completely,” Ford’s Mark LeNeve said in Chicago last week. Ford plans to offer plug four more holes with SUVs by 2020, and we expect at least one to be an efficient subcompact crossover, perhaps a next-gen EcoSport.

Automakers anticipating changes in demand may, using the Honda example again, make it difficult for buyers to locate the ideal Fit, a car that slid 47 percent in January, as they ramp up HR-V availability. Similarly, Hyundai will reduce Elantra and Sonata production levels as Santa Fe Sport availability increases. In addition to – and in advance of – changing tastes, these factors may cause the month in which Americans buy more SUVs and crossovers than cars to arrive sooner than we think.

Timothy Cain is the founder of GoodCarBadCar.net, which obsesses over the free and frequent publication of U.S. and Canadian auto sales figures. Follow on Twitter @goodcarbadcar and on Facebook.

Timothy Cain
Timothy Cain

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  • DevilsRotary86 DevilsRotary86 on Feb 16, 2016

    When will CUVs outnumber cars in American? As much as I hate to admit it, soon. When will CUVs outnumber cars in my driveway? When hell freezes over

  • Conslaw Conslaw on Feb 16, 2016

    This trend makes me sad, because cars are better now than they ever have been. Take the Honda Accord, for example. This vehicle has Full-size car room, a nice size trunk, decent handling. It's quiet and has all the features luxury cars had 10 years ago, and some they didn't. It is quick - even as a 4-cylinder, it stops well, yet it gets better gas mileage than the previous generation Civic. It is durable and holds its resale value well. It is very safe. Despite all this, adjusted for inflation, the car's price has stayed pretty steady over the years.

    • See 4 previous
    • Stuki Stuki on Feb 17, 2016

      @Jacob Man, you're the third person in two days, I have heard raving about the new Pilot. Sounds like Honda has hit a home run with that one. Price wise, the higher trim V6 Accords never really made all that much sense to me, aside from the 6MT coupe. But for 10K less than the Pilot, you could have a manual Accord that handles better, uses less gas, is actually an entertaining drive, and leaves you enough money for a last years model literbike... The Pilot will spank it handily for hauling sofas, and for giving pooch his own seat row, though. I'm not a big fan of CUVs, SUVs as road cars outside of very snow heavy locales, since by far the majority of my car miles (80%) are spent on long drives in open country. Once there is any risk of being stuck behind more than 3 cars at the average stop light, I'll take the bike, thank you. But for people who drive mainly in suburban/urban settings, I can totally understand building upwards, rather than sprawling outwards, to obtain a given amount of space. And while traditional SUVs were truly atrocious compared to their car brethren, the new CUVs are much less of a compromise. Sounds like the Pilot is really good. Now, if they could only figure out a way to avoid slapping my handguards with their mirrors as I zip on by lanesplitting..........

  • Bof65705611 CarPlay is awesome. Nav and music have been mentioned but it’s also amazing for texting, WhatsApp, my calendar, Zoom calls, FaceTime calls, and phone calls. I don’t like touchscreens in the car but both my cars (BMW, Mazda) use a rotary knob, which isn’t great, but doable with minimal time with eyes off the road.
  • Tassos Most people here who think it is a good idea have NO idea how much such a conversion costs. Hint: MORE than buying an entire new car.
  • Zipper69 Current radio ads blare "your local Chrysler, Dodge, Jeep, Ram dealer" and the facias read the same. Is the honeymoon with FIAT over now the 500 and big 500 have stopped selling?
  • Kjhkjlhkjhkljh kljhjkhjklhkjh hmmm get rid of the garbage engine in my chevy, and the garbage under class action lawsuit transmission? sounds good to me
  • ToolGuy Personally I have no idea what anyone in this video is talking about, perhaps someone can explain it to me.
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