Why SUVs Have Overtaken Sedans in America

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FREDERIC J. BROWN/AFP

Why ride close to the earth’s mortals when you can coast above the fray? U.S. auto consumers have officially made sport utility vehicles (SUVs) and crossover utility vehicles (CUVs) the top segment in the industry, edging out sedans for the first time in American market share, according to IHS Automotive analysis of Polk registration data. Behind the takeover is a desire for more space, added height, extra towing muscle, and other factors that involve the word “more.” Pickup trucks and hatchbacks join the sedan on the list of declining segments.

The SUV explosion

While every other auto segment held steady or showed slight decline in the Polk data, SUV and crosssover sales gained 2.6 percent through May 2014, allowing the larger vehicles to surpass sedans for the first time in history. IHS Automotive’s Tom Libby said pointed to the “higher seating position” and “higher ground clearance” as well as increased off-road and towing capability as the reasons for the uptick in SUV and CUV market share.

A look at new industry releases suggests automakers are focusing on this segment more than ever. Between the GM (NYSE:GM) 2015 SUV releases, crossovers by Porsche (POAHY.PK), and the new Jeep (NYSE:FIATY) lineup, it’s clear where the battle is being waged. In fact, it shouldn’t surprise anyone that the second mass-market offering by Tesla Motors (NASDAQ:TSLA) is a crossover utility vehicle set to go on sale in 2015. Even the electric vehicle consumer wants more.

Fuel prices and pickup declines

IHS Automotive’s Chris Hopson suggested pickup sales, which lost 0.5 percent market share through May 2014, could be dented even further in the long-term by higher oil prices and increasing fuel efficiency standards. In the short-term, SUV consumers seem convinced gas prices will stay reasonable. Other consumers are opting for smaller, more efficient utility vehicles to hedge their bets.

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