November 2, 2013

Boom in crossover SUVs accelerates

The compact utility vehicles built on small-car frames have broad consumer appeal across age groups.

By Tom Krisher
The Associated Press

DETROIT — Aging baby boomers. Couples with small kids. Single people with dogs.

click image to enlarge

Subaru Foresters on a lot at Salt Lake City and other crossovers offer better gas mileage than full-size SUVs but have more interior room than the compact cars on which they are based.

The Associated Press

All three groups love compact crossover SUVs, utility vehicles built mainly on small-car frames that are among the hottest-selling vehicles in the U.S.

So far this year, sales of the versatile, high-sitting hatchbacks such as the Honda CR-V, Ford Escape and Toyota RAV4 are up more than 20 percent.

From 2000 through last year, annual U.S. sales of small crossovers quadrupled, from just over 405,000 to well above 1.6 million, according to LMC Automotive, an industry data and research firm.

Only their larger cousins, midsize crossovers such as the Toyota Highlander and Ford Edge, grew faster. This year, sales of small crossovers have already passed last year’s record total of 1,656,497.

John Felice, Ford Motor Co.’s U.S. marketing and sales chief, said buyers have been moving to the small crossovers from other vehicles, a trend that has accelerated in the past three months.

“Some of the source of that shift has come from the car side of the business,” he said, after Ford reported a 17 percent decline in sales of its Focus small car.

Dealers and small-crossover owners say the vehicles are appealing for a number of reasons:

They get better gas mileage than big cars or SUVs, and they’re more maneuverable and easier to park. That appeals to downsizing baby boomers.

They sit higher, giving drivers a better view than cars. They have more room for kids in the back seat than the compact cars they’re based on.

With a big hatch and cargo compartment behind the rear seat, there’s room for dogs, golf clubs or bicycles.

Crossovers are generally cheaper than truck-based SUVs or large cars, staring around $19,000, although options can jack up the price. A loaded CR-V can run north of $35,000.

“I just did not want to drive a big vehicle,” says Carol Race, 66, of Winter Haven, Fla., who traded in a Mercury Grand Marquis large sedan for a smaller Ford Escape last summer.

“It’s so nice to have that extra room in the garage,” the elementary school secretary says.

Gas mileage also was important to Race. Her Escape gets 26 mpg in combined city-highway driving, while the Marquis got around 19.

Toyota started the segment with the RAV4 in 1995. The Japanese barely compete in the red-hot pickup market, so these vehicles complement their best-selling small and midsize cars. The Detroit automakers want to capture new buyers as they diversify their model lineups to rely less on pickup trucks and big SUVs for profits.

The Escape is close to outselling Honda’s CR-V, the longtime segment leader, for the second time in three years. Escape sales have grown 14 percent this year, almost twice as fast as the CR-V. Honda sold 251,636 CR-Vs through October; the Escape was next at 250,543. General Motors’ Chevrolet Equinox ranked third at 202,583, followed by the RAV4 at 177,832.

Subaru introduced a reworked Forester in the spring. It’s bigger inside than the old model, and gets better gas mileage. It was Subaru’s top-selling vehicle last month, and U.S. sales are up 57 percent this year to 96,953.

“We’re a roomy five-passenger car as opposed to a four-passenger car that you could squeeze five passengers into,” says Kirk Schneider, who owns a Subaru dealer in Salt Lake City.

Analysts expect the crossovers to maintain their popularity, although they’ll soon face new challengers.

Jeff Schuster, senior vice president of forecasting for LMC, sees growth in small crossover sales leveling off as automakers roll out more “multi-activity vehicles,” such as the Mazda 5. Those are boxier people haulers that sit lower to the ground than crossovers and in some models have three rows of seats.

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