SUVs have become a major source of revenue for automakers, with their popularity soaring among consumers in the United States. As a result, auto manufacturers are increasingly focused on producing these profit-generating vehicles. But how much is too much?
According to LMC Automotive, an automotive consulting firm, the availability of SUVs and crossovers in the U.S. market is projected to rise by nearly 53 percent over the next five years. The number of models is expected to grow from 118 in 2017 to a total of 180 by 2023, which includes both mainstream and luxury vehicles. Sales trends indicate that Americans are eager to purchase larger vehicles to suit their lifestyles, and this demand shows no signs of waning.
Naturally, with a thriving market, auto manufacturers are eager to introduce their own models. As they aim to capitalize on this opportunity, companies will seek to fill unique market niches. However, some may struggle to find success if they fail to innovate.
“I think everyone has read the same tea leaves,” remarked GM’s Vice President, Johan de Nysschen, in a statement to Reuters. “Right now there seems to be insatiable demand.”
The New York International Auto Show showcased the enthusiasm of manufacturers eager to display their SUVs, highlighting the influx of new models to the market. Among the featured vehicles were Land Rover’s Coupe SV, Lexus’s UX, Lincoln’s new Navigator, Maserati’s impressive 590-horsepower Levante Trofeo, Nissan’s Rogue Sport, Toyota’s new RAV4, and Volkswagen’s Atlas Cross Sport, illustrating just a fraction of the offerings on display.
As more automakers experience declining sedan sales in favor of SUVs and trucks, the trend is noteworthy. Currently, Nissan’s car sales account for only 53 percent of its total vehicle sales, a share that continues to shrink as larger vehicles take precedence. While the demand for SUVs appears to remain strong, consumers may have some encouraging news: prices could decrease in the future. To stay competitive, manufacturers will need to adjust their profit margins. Therefore, if you’re in the market for a large SUV or crossover in the coming years, you might find an expanding selection at potentially lower prices than in the past.
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