Crossovers the rule as cars, SUVs blend
By Jeffrey Krasner, Globe Staff, 11/2/2003
"The move toward the utility of a truck with the user-friendliness of a car is picking up steam," Casesa said. "These kinds of vehicles will come in all shapes and sizes and at all price points."
Consider the Scion. Toyota is creating this nameplate to market its xA and xB wagons, pitching them as hip entry-level vehicles to Gen Y types. The xB, a literal box on wheels adorned with shameless right angles and a cowcatcher front bumper, starts at $13,680. (The marketing plan is ingeniously subversive: The company's web site states, "Independent thought doesn't come from picking and choosing an identity from a series of prefab selections," and then encourages visitors to "build" a car by picking colors, fabrics, and accessories from menus.)
Some researchers have already christened the new segment exemplified by the Pacifica and Scion, calling them "tall wagons." In this school of thought, the first tall wagons were the Chrysler PT Cruiser and the Honda Element.
But in actuality, automakers are trying to further blur the lines between car, truck, minivan, and SUV. They're doing it in part by coining terms for vehicles that aren't really all that different. Current offerings include the sport activity vehicle, luxury activity vehicle, multi-utility vehicle, sport performance vehicle, and multi-activity tourer.
"What that says is that each of the manufacturers is trying to go after a similar space, but they're saying, `We need an angle because there's so much out there and we'll be lost in the crowd,' " said Jeff Schuster, director of North American forecasting for JD Power and Associates, a market research firm in West Lake Village, Calif. "The market is fragmenting at a staggering rate." So instead of trying to launch the next Taurus -- the sedan that for four years was the best-selling car in the country but was eclipsed in 1997 by the Toyota Camry -- carmakers are looking for smaller-volume niche models. Advanced, flexible manufacturing technology will help.
"Instead of one 400,000-unit vehicle, you can have six 75,000-unit vehicles," said Schuster. But there may be a downside: "Because manufacturers are spawning all these vehicles in search of the golden egg, there's a chance they could completely confuse the consumer and turn them off, because they don't know what any of these new products stands for."
One of those could be the forthcoming Ford Five Hundred, a performance sedan expected to mimic the ride height of a minivan -- in other words, a crossover. It's due sometime next year, probably as a 2005 model.
In the meantime, however, we have become a nation of light-truck drivers. Most pickup trucks, SUVs, and minivans are built on truck platforms, as opposed to car frames, and aren't subject to the same safety or fuel-economy standards as passenger cars.
In 1985, according to NexTrend, a Los Angeles market research firm, 71 percent of new cars sold in the United States were passenger cars -- sedans, coupes, and wagons. Of the remaining 29 percent, most were pickup trucks -- 17.4 percent of the total. Minivans and SUVs made up only 11.5 percent of the mix.
This year, NexTrend predicts, pickups will have about the same share of the market, and minivans, after peaking in popularity in 1995, will capture about 8.4 percent of sales. The big gainer is SUVs, which account for 26.1 percent of the market, or more than one in four new cars.
Given that backdrop, a few market watchers are willing to make some brave predictions.
Wes Brown, a partner at NexTrend, foresees further growth in light trucks. Over the next 10 years, he sees SUVs holding a full quarter of the new car market. Pickups will stay about steady at 17 percent, and minivans will decline slightly to just under 7 percent. He predicts growth from crossover segments such as tall wagons and car-based SUVs, at the expense of traditional cars.
But some see a gradual shrinking of vehicle sizes. Exhibit No. 1: the Ford Excursion, the mega-SUV introduced in 1999 to grab a slice of GM's Suburban franchise. The Sierra Club promptly nicknamed it the Ford Valdez, after the ill-fated Exxon tanker. Ford axed the model last year. Sheer size, in and of itself, is no longer a positive. "It's nice to know there was a limit to what people would buy," said Bruce Belzowski, a researcher at the University of Michigan's Office for the Study of Automotive Transportation.
John Heywood, director of the Sloan Automotive Laboratory at the Massachusetts Institute of Technology, said it won't be a radical downsizing, like the rush to dinky Japanese sedans and hatchbacks in the 1970s. It'll be more of a nip and tuck. "We'll still want all the comforts, but we'll be willing to package them tighter," said Heywood. Americans will come to appreciate the space efficiency prized by the Japanese and Europeans, even if our fleet remains substantially larger, he said.
But just about every prognosticator said all bets are off if there's an unforeseen energy crisis. Belzowski sees a replay of the 1970s, in which US carmakers lost out to the Japanese, who were able to sell cheap, reliable economy cars. This time around, the Japanese lead is in hybrid engine vehicles, such as the Toyota Prius. Such cars use a small gasoline engine to generate electricity, used to power an electric drive system. Others use an electric drive system to augment the gasoline powerplant. "An energy shock puts the Big Three automakers at risk because they do not have hybrids," he said. DaimlerChrysler, for instance, recently scrapped plans to build a hybrid, four-wheel-drive version of the Dodge Durango mid-sized SUV.GM does have a hybrid version of its full-size Chevy Silverado and GMC Sierra pickups coming out for 2005, but it's not as advanced as the Japanese models and the fuel efficiency would be a modest 12 percent.
Next year, Toyota's Lexus division will market a hybrid of its stylish RX 330 mid-size SUV. The pitch: It will offer 50 percent better fuel economy, while delivering more power than the traditional version. As it is, hybrids account for under 1 percent of the market, and it remains to be seen whether the combination of power and economy will attract drivers.
Jeffrey Krasner can be reached at krasner@globe.com.
© Copyright 2003 Globe Newspaper Company.
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