Skip to content

COMMENT: The frustrating popularity of the SUV

BY MARTIN KAHL. The rapid growth in demand for SUVs in all major markets is forcing OEMs to rethink their product offerings

The global popularity of the SUV continues. Attracted by their looks and rarely-used off-road capabilities, buyers are scuppering OEM product development plans and blatantly ignoring the calls of politicians and regulators looking to encourage downsizing and the adoption of alternative powertrains to meet the targets they spend so long developing.

In 2015, SUVs outsold passenger cars in Europe, accounting for 22.5% of sales across the region. Second place went to subcompacts (22%), third to compacts (20.6%). In the US, even family cars are making way for larger vehicles like crossovers and SUVs.

The popularity of SUVs has genuinely surprised automotive industry executives – not that they’re complaining. Smaller cars are less profitable than large cars – and the larger they get, the happier everyone becomes

The SUV issue was one of the apparently many factors behind Toyota’s surprise decision to can Scion, the brand it developed to tap into the youth market in the US. Much has been made of The Youth’s lack of interest in buying cars – but read that again in the context of current market trends, and it’s right there: those who are interested and able to buy cars don’t want cars, they want compact SUVs. Scion had one coming, as previewed by the C-HR concept, but it remained a concept. Expect to see it on a forecourt near you soon – badged as a Toyota.

The popularity of SUVs has genuinely surprised automotive industry executives – not that they’re complaining. Smaller cars are less profitable than large cars – and the larger they get, the happier everyone becomes. That popularity, however, is messing with product development plans.

According to FCA’s Sergio Marchionne, cars accounted for 46% of the US market in 2015, closely followed by SUVs at 37% and pick-ups at 17%. Cars made up 56% of the market in 2009, and Marchionne sees the shift from cars to crossovers and SUVs as permanent. In order to accommodate this market transformation, FCA will focus on larger vehicles, letting the Chrysler 200 and Dodge Dart passenger cars run out within 18 months in order to use the manufacturing capacity for Jeep and Ram production. The 200 and Dart are struggling in the market, a difficult admission for the man who once said that anyone who cannot compete in the US compact car segment is doomed.

As we continue to debate change in the car industry, perhaps we’re getting one thing very wrong – the word car

FCA is not alone in reassessing its product portfolio in the face of crossover and SUV popularity. Ford has announced a major initiative to turn its profitable European operation into a thriving one; the workforce will be reduced through “voluntary separation”, and any unprofitable models will be dropped in favour of those from high-growth segments – such as luxury and crossovers/SUVs.

As we continue to debate change in the car industry, the inevitability of the electric car and the advent of the autonomous car, perhaps we’re getting one thing very wrong – the word ‘car’.

[divider]

Martin Kahl is Editor, Automotive World

The AutomotiveWorld.com Comment column is open to automotive industry decision makers and influencers. If you would like to contribute a Comment article, please contact editorial@automotiveworld.com

Welcome back , to continue browsing the site, please click here