Crossover utility vehicles and compact SUVs represent the fastest growing segments in the global automotive industry in every region of the world, impacting both retail and fleet sales.
Australia: SUVs and crossovers are powering the Australian automotive market to possible record sales in calendar-year 2017. In June 2017, for the first-time ever, passenger vehicle sales were surpassed by SUV sales in the Australian market. Strong sales of SUVs and crossovers sales were key factors in making both CY-2016 and CY-2015 record sales years in Australia.
China: The best-selling OEM brands in the Chinese domestic market are being propelled by the introduction of new small crossovers, which are highly desired by Chinese consumers. OEMs in China are catering to this demand by regularly introducing new crossovers and SUVs being into the local market. One factor driving the regular refreshing of crossovers and SUVs by OEMs is that Chinese consumers change vehicles more often than owners elsewhere, and find newer crossover models more desirable.
Europe: Compact SUVs and crossovers are hot-selling products in European fleets. SUVs of all sizes and compact crossovers, in particular, are the choice of more and more European fleets. For instance, one out of four vehicles sold in Belgium is now an SUV. The industry forecast is for the small SUV market in Europe to surpass 2 million sales in CY-2018.
United States: Vehicle registration data shows that crossover vehicles now comprise 27 percent of the total auto market in the U.S., which is significant, considering the vehicle segment was virtually non-existent 20 years ago. As a consequence, OEMs are adjusting future product plans to meet this ongoing trend.
Impact on Global Fleet Sales
Commercial fleet sales are also reflecting an increased acquisition of crossover vehicles. Today, as a percentage, fleet registrations of crossover models are beginning to mirror the market share found on the retail side of the business.
A crossover is defined as an SUV-like vehicle built on a car plat-form. Crossovers use unibody construction, typical of passenger vehicles, instead of the body-on-frame platform used in light trucks and many SUVs. A crossover also combines SUV features with features found in a car, especially station wagons and hatchbacks. For example, a crossover includes common SUV characteristics, such as greater interior volume, a higher center of gravity, and high ground-clearance, which are combined with car-like handling and increased fuel economy.
Crossovers are shifting fleet buying preferences in the type of vehicles found on fleet operations. Today, there is a growing acceptance of crossovers as a fleet vehicle. Once crossovers were considered an upgrade; however, today, these vehicles are now in fleets in representative ratios as the retail market.
Crossovers continue to be a popular choice for many fleets, because of their versatility and strong residual values. A growing number of fleet managers around the world are selecting crossovers and SUVs instead of sedans. With crossovers now achieving comparable fuel efficiency, TCO, and higher levels of driver protection, they’re becoming the vehicle of choice for more fleets.
Other factors stimulating fleet acquisition of crossovers and compact SUVs are ergonomics, an all-wheel-drive option, and increased cargo-carrying capabilities. Fleets are migrating from sedans to crossovers and SUVs for the same reasons that retail customers have migrated toward utility vehicles. The ingress and egress is easier and there is more cargo room for equipment, products, and samples. The interiors are also roomier for those fleets that transport personnel. Another very important feature of utilities is all-wheel drive, making them popular with fleets operating vehicles in areas prone to inclement or harsh weather conditions.
Market Share Forecast
In the U.S., the crossover segment caught everyone’s attention in 2006, when crossover sales made up more than 50% of the overall SUV market. In 2014, cross-over sales overtook the sedan as the most purchased body style in the U.S. As crossover sales continue to grow, crossovers promise to become even more pervasive in OEM lineups. Even exotic brands, such as Aston Martin and Lotus, are studying CUV entries. In the retail market, virtually every OEM brand has recorded increases in light-truck sales, which includes pickups, crossovers, and SUVs.
Proponents forecast the fleet market share of crossovers and compact SUVs will continue expand because they integrate the best features of both a car and truck. Also, higher residual values make the TCO of this segment very attractive. As a result, crossovers and compact SUVs promise to have an even greater presence in corporate fleets not only in North America, but also China, Australia, and Europe.
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