Source: Ford Motor Company Press Release
Like any industry, the automotive market is subject to trends based on consumer demographics and tastes. Starbucks transformed our cup of Joe. Apple’s iPod altered how we listen to music. And new, fuel-efficient crossover utility vehicles (CUVs) are the next major evolution in what we drive.
Crossovers are a new type of automobile that combines a more car-like drive with much of the versatility and utility of a Sport Utility Vehicle
How fast is the CUV market growing? The term "crossover utility vehicle" didn’t even exist in 2000, when a smattering of small car-based utilities totaled just over 500,000 sales. In 2005, CUV sales are projected to tally 2.2 million units. That’s faster than the explosive growth of SUVs during their heydays of the 1990s. (see charts, below)
Why? According to Ford sales analyst George Pipas, it’s not just high gas prices, but market demographics. He says the estimated 65 million to 70 million consumers in the baby boom generation are driving the growth.
"High gas prices this summer definitely influenced the decline the rise in CUV popularity," said Pipas. "But fuel costs are not the cause, only the accelerator. As gas prices fluctuate up and down, they will only speed up or slow down the rate at which crossovers increase while traditional SUV sales move to a smaller percentage of the market."
In the ’80s, these baby boomers flocked to minivans, looking for a convenient way to transport their young, growing families. In the ’90s, these same boomers were attracted to the versatility and adventurous style of truck-based, V-8-powered sport-utilities.
In the first decade of the new millennium, boomers have fewer children living at home and decreased needs for seating capacity. As a result, boomers are turning to the emerging CUV market, attracted to car-based, V-6-powered utility vehicles that offer all the style and functionality of an SUV but are lighter weight, thus more agile and fuel efficient.
"As baby boomers approach their 60s, they need cars for grandkids, not children," said Pipas. "They need seating for occasional use when the grandkids visit, not the day-to-day child transportation they needed 10 years ago. Plus, they aren’t quite as limber as they were 10 years ago, so the idea of climbing into a taller truck isn’t as appealing as it once was."
These baby boomers are joined by younger families, also attracted to the stylish exterior, functional interior and fuel efficiency offered by a CUV. These buyers need seating for their families and room for their associated gear, but do not yet need the full seating of a minivan or the increased towing capacity of a traditional V-8 sport-utility.
The new, 2007 Ford Edge, arriving in showrooms winter of 2006, exemplifies the appeal CUVs offer to both baby boomers and young families. For style, the Edge offers a rakish profile, 18-inch wheels and a bold four-bar grille. For functionality, the Edge offers seating for five, up to 63 cubic feet of cargo, integrated storage for laptops and MP3 players, and six cup holders to accommodate all the occupants’ triple nonfat lattes.
Pipas warns, however, you shouldn’t write off traditional SUVs just yet.
"CUVs are clearly surpassing traditional SUVs in terms of growth and overall sales," he said. "You can expect SUV sales to go down to about two million a year by the end of the decade versus 2.4 million today. But there will always be buyers who need the towing and hauling capacity or off-road capability that a traditional SUV offers."