The global recession we have all been so attuned to hasn’t completely passed us by, and the far-reaching effects continue to be felt in today’s auto industry. As consumers downsized their expenses and purchases over the recent years, comparing recent sales numbers with pre-recession figures has given credence to what has long been a generally accepted belief: Smaller vehicles are making up more and more new-vehicle sales.
With June sales figures in, it has been revealed that cars, car-based crossovers, and minivans have outsold light trucks for the first half of 2010, growing the all-encompassing car group to 77.2 percent of the market. Barely three years ago, passenger cars and associated vehicles held a little over two-thirds of the market at 68.9 percent.
Taking a deeper look, it’s easy to see where the change occurs. The compact and midsize car segments are responsible for 13.8 and 30.3 percent of the market this year respectively, combining for 44.1 percent of all vehicles. Likely to be helped by the growing popularity of the smaller subcompact class, the B-, C-, and D-segments are pegged for continuing maturation as consumers head down-market and away from the more premium offerings. In 2007, the C- and D-segments delivered 12 and 27.9 percent of the market.
Around the car scene, premium and upscale models have managed to hold down the fort at 6.4-percent market share. Within the luxury marques, however, demand has shifted from the mid- and full-size to the compact, including the likes of the BMW 3 Series and Mercedes-Benz C-Class. Sporty and sports cars also stay unchanged at a 3-percent share, although entry-level fast rides such as the new Ford Mustang and Chevrolet Camaro have helped push the more attractively priced end into prominence.
When one rises, one must fall, and in this instance, the SUV has taken a dive during the three-year time frame. Off its 12.8-percent share in 2007, traditional body-on-frame SUVs have declined to 7.9 percent in 2010, while the flourishing crossover has expanded to 19.6 percent, up from 14.4 percent in 2007. Pickup trucks are off its 2007 pace, but continue to serve a need for commercial customers.
“When gas prices spiked [in 2008] and manufacturers dropped big incentives on high-end trucks, consumers felt burned and SUVs got hit real hard,” said George Magliano, a forecaster for IHS Automotive.
One new vehicle that exemplifies the downsize movement is the painfully teased Ford Explorer. The newest generation rides on a modified unibody platform shared with the Flex, a departure from its long-time body-on-frame architecture, which helped propel it to the top of the SUV market over a decade ago. Entering its fifth generation, the new Explorer will have the benefit of its well-known nameplate, but former owners and so-called SUV purists have proved willing to deride the unibody conversion, despite the fact that Ford’s newest crossover hasn’t been formally debuted. Once released, only testing will prove whether the detractors were justified.
Although consumers have shifted preference to down-market vehicles, the average transaction price has risen over the years. Automakers have better equipment and more widely available technological content to thank, as today, entry level is no longer equated with low end and low tech. The greater number of options helps push revenue, even if the point-of-entry on smaller vehicles is lower.
Has the general market change affected you in recent years? Are you willing to compromise the interior volume, engine, and overall dimensions of a larger vehicle for a more bite-sized and affordable price? Let us know if you will soon be in the market for a subcompact or compact or if you will never let your full-size truck go in the comments below.
Source: Automotive News (Subscription required)