Automakers are responding to a profound pivot in consumer demand away from passenger cars. Convertibles, coupes and sedans made up the majority of sales as recently as 2012. They’ve accounted for only a little more than a third of industrywide deliveries this year. Nissan forecasts that light trucks, which include SUVs, will be 70 percent of the market by 2022, Munoz said.
“The concern with this shift is for an industry prone to cycles, the growth in supply of crossovers may soon overtake demand,” said Jonathan Smoke, chief economist for Cox Automotive, which owns car-shopping websites including Kelley Blue Book and the vehicle auctioner Manheim.
Incentives on crossovers already exceed those of cars, which is helping keep the sales momentum going, Smoke said. Next year, Cox estimates that light truck deliveries may increase about 2 percent while cars drop 11 percent.
Hefty discounts have made the small SUV segment as competitive as the cutthroat car business, Joe Hinrichs, Ford’s president of global operations, said earlier this month.
“We’ve seen competition heat up in that segment and I expect it to continue,” Hinrichs told analysts and investors at a Goldman Sachs conference in Boston. “It has felt some of those pricing pressures that the car business has felt.”
This article was provided by Bloomberg News.