Compact CUV demand up in 2010

(October 23, 2010) Demand for compact crossovers (CUVs) outpaced the industry in September 2010 and through the first nine months of the year, according to Power Information Network (PIN) retail transaction data and analysis by the Automotive Forecasting Division at J.D. Power and Associates.

In fact, during the first nine months of 2010, more than one of every 10 new vehicles purchased or leased was a small crossover (10.06% share of industry sales vs. 9.64% in 2009).

The category’s best-selling models — such as the Honda CR-V, Ford Escape and Toyota RAV4, respectively — significantly outperformed the industry in September vs. a year ago, and also outdistanced the industry on a year-to-date basis.

“The demand for CUVs continues to rise as consumers look to more fuel-efficient options to replace their traditional SUVs,” said Steve Elliott, Automotive Forecasting analyst, pointing out, “Crossovers offer the seating and cargo capacity of traditional utility vehicles paired with the better fuel economy, handling and ride comfort of cars.”

During the latest quarter (July-September 2010), PIN retail transaction data indicates that among all sub-segments, compact CUVs had the largest percentage of female buyers. Compact CUVs also moved off dealer lots faster in the third quarter than did vehicles in all other sub-segments. In addition, compact CUV owners were more loyal this year than a year ago. Nearly twice the percentage of compact CUVs purchased in the third quarter this year vs. last year included a compact CUV trade-in.

More highlights about these popular vehicles, based on J.D. Power research and PIN data:

• Compact CUV sales in September climbed by more than half (+53%) from the same month a year ago—outpacing the industry’s 28.5% year-over-year increase. Deliveries in September improved by 33,816 units from last year, to 97,315 unit sales.

Ford Escape and Honda CR-V remain hot sellers in 2010

• Nearly 113,600 more compact CUVs were sold through the first 9 months of 2010 than in the same time frame of 2009. On a year-to-date basis, sales of compact CUVs increased more than 15.6%, to 865,381 unit sales vs. 751,835 unit sales in the same period of 2009.

• The CR-V retained its title as the best-selling compact CUV, with 144,266 unit sales in the first nine months, followed by the Escape (142,820 unit sales), RAV4 (126,391 unit sales) and Chevrolet Equinox (9
9,055 unit sales).

General Motors is still a major player in the category. Deliveries of the two core entries — Chevrolet Equinox and GMC Terrain — combined with those of the discontinued Saturn Vue and Pontiac Torrent, totaled 142,123 units in the first 9 months of 2010.

Demand for the new Nissan Rogue improved significantly. In September 2010, Rogue sales climbed 63.5% from year-ago totals, and 9-month totals were up more than 20% from the same period a year ago, to 71,765 unit sales vs. 59,612 unit sales in 2009.

In the third quarter of 2010, more than half of compact CUV buyers or lessees (50.7%) were female, which is up from 45.3 % in the same quarter of 2009.

Compact CUVs moved off retailer lots the fastest among all sub-segments analyzed by PIN in the third quarter of 2010. The retail turn rate for compact CUVs was 29 days, down from an average 45 days a year ago.

Although the average compact CUV buyer in the third quarter of 2010 was 50 years old, that was a year younger than in the first 9 months of 2009.

In the third quarter of this year, 18.9% of compact CUV purchasers traded from another compact CUV, which was up 8.4 percentage points from last year’s same quarter (10.5 %), when the CARS program, designed to scrap less fuel-efficient vehicles, was in place.

J.D. Power Perspective: Compact CUVs, which are defined as car-based or unibody utility vehicles, continue to be one of the hottest categories with consumers, based on gains in sales volume and retail turn rates that are half of the industry’s average. Also, there appears to be a preference for these smaller CUVs among female buyers and lessees, most likely due to attractive price points. The average transaction price (less customer cash rebate) for a compact CUV in the third quarter was less than $25,000 ($24,538), an increase of 5.7% from an average $23,210 in the third quarter of 2009.

Although compact car and light-truck sales share dropped to 39% of overall light-vehicle sales in the first nine months of 2010 (vs. 41% in 2009), compact CUVs helped bolster the super segment in relation to the slightly larger midsize vehicle share (39.5%).  A majority of current and new entries in the compact CUV category posted sales gains this year vs. 2009. Only the discontinued GM models—Pontiac Torrent and Saturn Vue—and the Honda Element and Mazda Tribute posted declines. Sales of the new 2011 Kia Sportage were lower than a year ago with the production buildup since its July launch.

J.D. Power’s Elliott adds, “As the segment heats up, automakers will continue to offer additional models for consumers to choose from. Having these models in their lineup will also help OEMs meet upcoming new CAFE requirements.”