Major automakers acquaint alloyed U.S. new agent sales in October, but high-margin auto truck, SUV and crossover sales were up. Fred Katayama reports.
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The 2018 Ford Expedition SUV goes through the accumulation band at the Ford Kentucky Barter Plant in October 2017 in Louisville, Kentucky.(Photo: Bill Pugliano, Getty Images)
Shoppers could be in luck abutting year as a flood of new and agilely acclimated SUVs creates bargains on America’s best accepted vehicles.
2019 could be a year of abundant deals on SUVs as incentives on new models acceleration and off-lease, late-model acclimated SUVs hit the bazaar in aberrant numbers. Abate SUVs like the Ford Escape, Hyundai Santa Fe, Toyota RAV4 and Chevrolet Equinox should be in decidedly aerial supply
“It’s activity to be a actual awash marketplace,” IHS Markit chief analyst Stephanie Brinley said.
IHS projects U.S. SUV sales will abide to abound from 7.4 actor in 2015 to 10 actor in 2025. That advance — and the actuality that sales of acceptable cars are falling in accompany with SUVs’ ascendance — explains why about every automaker is alive its advance and development focus from cars. Fiat Chrysler has absolutely alone the bunched and midsize car segments. Ford is in the action of switching from acceptable cars like the Focus, Fusion and Taurus to taller, SUV-type vehicles.
IHS predicts the cardinal of SUV models awash in the U.S. will acceleration from 116 in 2017 to 190 in 2025.
Don’t aberration this for a U.S.-only trend. IHS says Chinese SUV sales will acceleration from 7 actor in 2015 to 15 actor in 2025.
That’s a compound for bloodthirsty competition, and a claiming for automakers, as the gravy alternation slows for cartage that accept been accumulation machines for years as accumulation struggled to bolt up with demand.
The arrangement will about-face in 2019, according to Zo Rahim, Cox Automotive analysis manager.
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That will be the aboriginal year aback the cardinal of SUVs advancing off three-year leases exceeds commuter cars. Many of those cartage will accept about the aforementioned looks and appearance as new ‘19 models, ambience the date for acute competition.
“There’s a tsunami of off-lease and used, like-new SUVs advancing aback into the bazaar in 2019 and ’20,” Rahim said.
“It’s an SUV war as automakers action their own off-lease cartage and all the new models advancing in the abutting two or three years. The bazaar will be abundant added competitive.
“This is abundant for consumers. Incentives are acceptable to rise, and the accumulation of acceptable acclimated cartage will increase.”
This isn’t the end of the SUV boom. There’s still affluence of money to be fabricated from SUVs, but automakers will accept to assignment harder to advertise them, Brinley said. It can amount $100 actor artlessly to advise barter a new nameplate exists, the aboriginal babyish footfall against affairs a vehicle.
“The bazaar is activity to be abundant added awash and competitive,” Brinley said. “An SUV gives you added amplitude and utility. Bodies are accommodating to pay added for that, but how abundant they’re accommodating to pay will compress as the cardinal of accessible SUVs rises.”
Industry assembly say the boilerplate amount for an SUV in the United States has been about $8,000 added than for a commensurable sedan. That appraisal covers aggregate from auto SUVs to $100,000-plus cartage like the Cadillac Escalade and Lincoln Navigator, so the added allowance on abate mass-market SUVs is already abundant smaller.
Automakers will accept to footfall up their architecture and engineering amateur to carve out a alcove in this awash marketplace.
“The bunched and auto SUV segments are abundantly competitive,” said Erich Merkle, Ford’s U.S. sales analyst. “Every automaker wants to accept two or three entries there.”
2018 Nissan Kicks SR (Photo: Mark Phelan, Detroit Free Press)
That will advance to experimentation, as automakers try new account to win business. The Nissan Kicks is an example. It looks vaguely like an SUV, but doesn’t action all-wheel drive or some added accepted appearance to accumulate its abject amount beneath $18,000.
Another is Ford’s accessible Bronco, a babyish off-road-oriented SUV that will try to parlay a accustomed name and off-road adeptness into a atom on buyers’ arcade lists. It’s due to go on auction in 2020, aback antagonism will be frenzied.
For the aftermost few years, any new SUV could calculation on advantageous sales. That will change as showrooms and parking lots ample up with SUVs from every apprehensible brand.
Newer cartage will accept an advantage, but aloof actuality new won’t be enough. Automakers will accept to apprentice how to accord SUVs audible characters like their cars acclimated to have.
That’ll be accessible for brands like Jeep and Land Rover, which accept acclaimed histories of off-road adequacy and aggressive service. Added brands and new nameplates with no ancestry will accept a tougher time.
Despite that, the SUV bazaar will abide too big and too affluent for any automaker to ignore.
Demographics will comedy a role. Merkle predicts babyish boomers will appetite SUVs’ acme and affluence of access as they abound older. Empty nesters will accumulate the bazaar for babyish SUVs humming.
At the aforementioned time, the alike beyond millennial accomplice of the citizenry is abutting its prime child-rearing years.
“They’re starting to attending at three-row SUVs to backpack the family,” Merkle said. “In the abutting 5-10 years, millions of bodies will move into the bazaar for that affectionate of vehicle.
“We haven’t apparent the aiguille of sales or advantage for those cartage yet. There’s added advance to be had.”
And in the meantime, some candied deals.
Contact Mark Phelan: [email protected] or 313-222-6731. Follow him on Twitter @mark_phelan
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