SUV sales pass sedans in U.S. as crossovers boost sales

Bloomberg NewsJuly 16, 2014 

On The Money Fuel Saving Cars

This undated image made available by Ford shows the 2012 Ford Escape Hybrid.

ANONYMOUS — AP

— Sport utility vehicles have overtaken sedans in U.S. market share, aided by more fuel-efficient, car-like crossover models, IHS Automotive said Wednesday.

SUVs, including crossovers, accounted for 36.5 percent of U.S. new-vehicle registrations this year through May, compared with 35.4 percent for sedans, the IHS Inc. unit said in a statement. Sedans, which held the top spot for decades, had led 36.6 percent to 33.9 percent a year earlier, IHS said.

Compact and mid-size crossover SUVs such as Ford’s Escape, Toyota’s RAV4 and Nissan’s Rogue have gained in popularity in the past several years. Such models are smaller and use less fuel than traditional truck-based SUVs and are built on car-style unibody underpinnings.

“It’s not that sedans have become unpopular,” Tom Libby, a Southfield, Michigan-based analyst at IHS, said in an interview. “It’s just that CUVs have really grown. They drive like cars, but they have higher positioning, the option for four-wheel drive and better fuel economy. There’s more space for seating. It’s easy to see why they’ve taken off in popularity.”

Crossover models have revived an SUV market that was damped by higher gasoline prices and the recession that began in 2008. Automakers, especially U.S. companies like General Motors and Chrysler, had depended on large, gas-guzzling SUVs such as the Ford Expedition and the Chevrolet Tahoe.

Crossovers, first introduced in the 1990s, won over more buyers, spurring competition, Libby said.

“The companies were all watching the success of their competitors in the crossover market, and they all realized that they had to get in on it,” he said. “Just about all the major brands have a crossover now, and they’re doing well because of that.”

Automakers are slowly phasing out larger SUVs in favor of crossovers, Libby said.

“You have all these mid-sized vehicles that fit the needs of so many different consumers that it makes more sense to focus on them,” he said. “Large, traditional SUVs have plummeted in market share, and meanwhile crossovers are sort of scraping off a little bit of market share from just about every other vehicle type.”

Crossovers also appeal to different age groups, a key for automakers, said Michelle Krebs, a senior analyst at AutoTrader.com. Younger buyers can move up from a small, entry- level car into something mid-range as they start families, while older drivers can switch to something smaller from their larger SUVs or trucks.

“We’ve seen a huge transformation in the way people view SUVs, in the general sense of the term, because SUVs themselves have changed,” Krebs said.

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