SUVs Are Driving Auto Sales. Will It Last?

Trucks are conquering the current market, but sedans are looking to crawl out of the way-way back.

Conventional wisdom says SUVs and crossovers are set to reign as kings of the road, but new market research suggests a changing narrative.

Trucks and SUVs are the perfect vehicles for any number of big chores — from hauling junk to towing a trailer. But in the past few years, these kings of the road have been facing a new task: carrying the auto industry.

Of course, this is no secret. With their multitude of uses and significantly higher price tags, pickups and SUVs have been nudging sedans from showroom floors for over a decade now — a shift that seems poised to continue for the foreseeable future. In fact, by 2022 an estimated 84 percent of vehicles sold in the U.S. by GM will be a truck or SUV, according to LMC Automotive.

But is this a desirable place for auto dealers to be? Can these byway behemoths be counted on to keep delivering customers from Gen Z, who are environmentally conscious and financially savvy like no generation before?

Rigs On A Roll

SUVs offer the sort of versatility that won’t soon go out of demand.

First things first, SUVs are dominating the market for a very simple reason: They can do it all. With roominess, versatility and safety in spades, these vehicles have also seriously upped their creature comfort game, with the ability to shift effortlessly from a dump run to hauling the whole infield to Little League practice.

And this versatility isn’t likely to go out of style any time soon, say experts.

“I do not see the popularity of this segment as merely a fad,” says auto blogger Liz Jeneault of Faveable.com.“The sales numbers don’t lie.”

After all, the notorious gas-guzzlers have suffered previous setbacks, usually tied to fuel costs. When pump prices skyrocketed during the 2008 Great Recession, trucks were considered DOA. With the stabilizing economy, however, came lower gas prices — and trucks and SUVs have been flying off the lots ever since.

But as auto sales have begun to falter in 2019, many are asking if trucks and SUVs don’t have a more fundamental weakness: an inability to meet the needs of younger, more cost-conscious customers.

Sedans Are Coming

A new generation of drivers are looking toward the sedan as their car of choice.

In fact, younger generations are overwhelmingly choosing sedans — primarily due to their affordability. And with Gen Z estimated to make up 40 percent of consumers by next year, dealers may not want to write off those gritty little sedans and subcompacts just yet.

“We think younger generations will buy more sedans than older generations,” said Nissan’s Bruce Pillard, while introducing the 2019 Nissan Altima last year, which he positioned as one of the company’s biggest investments ever.

While noting that the sedan segment is a “smaller market than it used to be,” Pillar said he’s counting on young people to make sedans cool again.

Other indicators seem to support that sentiment. In a recent QuoteWizard review of insurance data for the most-driven cars among people aged 22 to 37, SUVs didn’t even crack the top five spots. Those all went to cheaper sedans, with the Honda Accord leading the pack.

“Earning less money and being buried by debt is a huge factor,” according to QuoteWizard, which also noted that urbanization trends show millennials are happier living in big cities.

Making Room For Both

Market share might dip, but popular features and capabilities of the SUV are expected to remain popular.

In the meantime, trucks and SUVs are continuing their domination. In fact, Toyota’s North America Sales Chief Jack Hollis has predicted they’ll soon represent 70 percent of the overall market.

Their staying power will also likely be helped by their embrace of desirable tech and safety features like rearview cameras and blind-spot warning systems.

“We can expect to see more brands offer premium features in these vehicles, turning what used to be a functional family or work car into an entertainment hub with smartphone and bluetooth compatibility and infotainment systems,” said Richard Reina, product training director at CARiD.com.

In other words, SUVs aren’t just for towing; they’re total lifestyle vehicles that are showing no signs of wearing out their welcome.

Still, with customers increasingly demanding better gas mileage, and electric vehicles steadily marching toward wider adoption, don’t be surprised if sedans once again start to make inroads on the roads of the future.

“Yes, the importance of SUVs to an entire portfolio is something you’d be remiss not to focus on. [But] [y]ou’re not just going to be an SUV brand,” said Bob Broderdorf, director of Alfa Romeo North America. “You will always have enthusiasts who want to have that exhilaration and feel of driving a car.”