Automakers, Industry Analysts Surprised by Upswing in Full-Sized SUV Market
Friday, July 30th, 2010It’s no secret that car buying trend news has been pretty much devoted to hybrids, plug-in electric hybrids, and fully electric cars for the past few years, and that’s fine, because going green is important, but something you may not find out from the nightly news is that there’s been a new upsurge in the popularity of full-sized SUVs. Specifically, according to a report from Kicking Tires, sales of these vehicles have increased by 19%, as compared to an overall industry growth-rate of 17%. The full-sized SUV category is comprised of large-sized body-on-frame vehicles like the GMC Yukon and large crossovers like the Chevrolet Traverse and the Lincoln MKT.
This upswing in the SUV market is apparently surprising carmakers as well as the general public. GM has had to authorize overtime at their production plant in Arlington, TX, where the Cadillac Escalade and Chevrolet Tahoe are made, because they have such low inventories of these models. USA Today reports that employees there are working 10 hours a day and on Saturdays to meet demand. As well, both Nissan and Toyota are having difficulties keeping up with the demand for their 2011 QX56 Infiniti and Sequoia, respectively.
So, why are SUVs so popular again? Several news sources are speculating that it might be related to forthcoming regulations that could make these vehicles, if not rare, than at least incredibly expensive to own or operate, because of more stringent Corporate Average Fuel Economy standards. Stable gas prices, currently at $275/gallon may be a factor as well.
Large SUV sales are good for automakers because it’s basically like “printing cash,” says Jim Hall at 2953 Analytics. That’s because traditional body-on-frame SUVS share much of their hardware with full-size pickup trucks.
And how are compact cars faring in this market? Interestingly, not so well. They’ve only seen a 14% growth rate so far this year.