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

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

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

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

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

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.