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SUV craze shows no sign of slowing down
Bloomberg
Nov. 17, 2016 3:10 pm
For more consumers, the decision to buy a new car quickly becomes a choice to buy some kind of sport utility vehicle.
As this year's Los Angeles Auto Show demonstrates, automakers are rushing to feed that demand, especially given signs that industrywide U.S. sales are peaking.
Alfa Romeo revealed its first-ever SUV, the sleek Stelvio, while Jaguar introduced an electric I-Pace concept. Mini pumped up its Countryman crossover, while Ford is bringing its EcoSport to the United States.
Mazda has a new CX-5, and Volkswagen showed the seven-seat Atlas conceived to woo American shoppers.
The onslaught of SUVs - typically big profit generators - should help insulate the automakers from next year's predicted decline in U.S. vehicle sales. Light trucks - which include SUVs, pickups and vans - climbed to 59 percent of U.S. sales this year through October from 55 percent a year earlier, according to researcher Autodata Corp.
In an era of low fuel prices, much of the gain has been from new SUV models, and the shift shows no sign of ending.
'We don't know what the ceiling for SUVs is,” Dietmar Exler, who runs Mercedes-Benz sales operations in North America, said Tuesday at a conference. 'Is it 60 percent? 65? We don't know.”
SUVs are the overwhelming choice when consumers switch from one class of vehicle to another, including almost a third of everybody who trades in a car, according to Edmunds.com.
The trade-off suits both sides: Consumers get more storage and a more elevated view, while automakers earn more profit from SUVs than sedans.
And once someone buys an SUV, they tend to buy another. This year, 72 percent of people trading in a sport utility decided to stick with that vehicle class - considerably higher than car loyalty at 62 percent and very close to pickup loyalty at 74 percent, Edmunds.com senior analyst Jeremy Acevedo said.
Bloomberg The Nissan Rogue sport utility vehicle is unveiled during Automobility LA ahead of the Los Angeles Auto Show in Los Angeles on Wednesday.