The SUV is here to stay, like it or not.
SUVs are a staple of the American automotive landscape and have been elevated to gas guzzler status more or less as hybrid vehicles started being commercialized.
Today’s situation is has evolved and is very different. SUVs have now been declined in compact and/or crossover utility vehicles (CUV), often based on compact vehicles and offer better fuel consumption than many midsize vehicles did twenty years ago. And their popularity is undeniable.
Let’s take Ford Motor Company as an example in light of the news we published earlier this week about hybrids loosing ground sales-wise and Ford’s F-150 sales on the rise.
Ford utility vehicles, which range worldwide from the compact EcoSport to the eight-seat Expedition, accounted for 23 percent of the brand’s sales globally in 2013. This is up from 17 percent a year earlier.
By the end of the decade, Ford projects utility vehicles will account for 29 percent of its global sales. Ford explains this by stating more consumers choose the versatility and capability of an SUV.
“The success of the One Ford plan is continuing to pay off,” said Jim Farley, Ford executive vice president, Global Marketing, Sales and Service. “As utility vehicle demand rises around the world, our global lineup of vehicles, like EcoSport, Escape/Kuga and Edge, is helping us grow our share. The global desire for new utility vehicles is driving expansion in developing markets like China and helping the Ford brand reach more customers.”
America is not the only area enamored with the SUV concept. Utility vehicle sales are expanding rapidly in many of the world’s fastest-growing markets – including Europe and China – according to a Ford analysis of data from IHS Automotive, which forecasts market information and competitive data on the automotive industry.
According to these numbers, worldwide demand for utility vehicles is up 88 percent since 2008, making SUVs the fastest-growing segment. Utility vehicles now account for 19 percent of the global automotive market, with the segment expanding at more than three times the rate of the vehicle industry overall.
In Europe, stated Ford, the utility vehicle segment grew from 9 percent market share in 2008 to 19 percent in 2013. Sales of the Ford Kuga, known as the Escape in North America, increased 33 percent for the full 2013 sales year in Euro 20 markets, and also reached record levels January through September 2014.
To capitalize on the utility segment’s strength in Europe, Ford introduced the EcoSport earlier this year, and an all-new 2015 Ford Edge goes on sale there in late 2015. Both the Edge and the EcoSport are new entries for Ford in Europe.
Ford’s story is similar in China, where interest in utility vehicles drove the segment from 7 percent of industry sales in 2008 to 17 percent in 2013. Ford’s overall sales growth in China – the largest market in the world – is said to be robust. The Canadian-built Ford Edge launched in China in January 2011, with three more utilities – Ford Explorer, Kuga and EcoSport – debuting there in 2013.
From January through September 2014, more than 100,000 Kugas and more than 60,000 EcoSports have been sold in China, with significant year-over-year increases, added Ford. Edge sales in China are up 70 percent over 2013, and sales of the Explorer increased approximately 200 percent over 2013.
In the United States, baby boomers and millennials – the two largest demographic groups – are choosing utility vehicles, according to Ford. Small utility vehicles, also known as CUV, are now the largest segment in the U.S. market. A record number of Ford Escapes were sold in 2013, with sales up in 2014 as well. Also, Ford Explorer and Expedition are selling at a pace not seen in nearly a decade.
Part of Ford’s success is linked to its turbocharged EcoBoost range of engines, which in theory allow fuel consumption reduction while also providing full power when needed.
The story also applies to other manufacturers and explains why we are seeing so many new CUV being launched. Look at Honda with the Fit-based upcoming HR-V (also known as Vezel), or at Fiat, Chevrolet and Mercedes-Benz all offering or entering the market with new offerings in the segment.
This all begs the question. When will we see a mainstream hybrid CUV in North America? Or a Prius CUV?