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Sales of car-based “crossover utility vehicles” like the Ford Escape and Honda CR-V will surpass sales of traditional SUVs in 2006 in a trend that has been accelerated by high gas prices, Ford Motor Co.’s top sales analyst said yesterday.
“As eye-popping as the growth was of traditional SUVs in the ’90s, it’s bigger for the CUVs over a similar 10-year period,” Ford U.S. sales analysis manager George Pipas said. “The CUV will be the vehicle of this decade.”
The Associated Press reported that while Ford currently has the top-selling crossover – the Ford Escape – the trend is troublesome for Ford and other U.S. automakers, which have relied more heavily on SUVs for their profits than have foreign automakers. An automaker can make up to $20,000 in profit from the sale of a large SUV. The popularity of SUVs has also helped power sales of towable recreational vehicles.
Crossovers are built on car platforms and have a more carlike ride than traditional sport-utility vehicles. There are 41 models on the market this year, compared with 14 in 2000 and none in 1995. Pipas said that by the end of next year, there could be close to 50 crossover models, the same number of SUVs offered when SUV sales were peaking in 2000.
The Toyota RAV4, introduced in 1996, is generally considered the first crossover vehicle. In 2000, just 541,000 crossovers were sold, compared with 2.97 million SUVs. Pipas is expecting total crossover sales in 2005 of 2.24 million and total SUV sales of 2.4 million.
Three years ago, Pipas was predicting crossovers would eclipse SUVs by 2009 or 2010. Ford anticipated that Baby Boomers would want vehicles that were closer to the ground than SUVs.
But rising gas prices have accelerated the trend, Pipas said. In the first quarter of 2004, the cost of oil was $35 a barrel. That rose to $63 in the third quarter of 2005. As a result, SUV sales are off more than 13 percent this year, compared with a drop of about 3 percent last year. Sales of large SUVs like the Lincoln Navigator are off 18 percent, Pipas said.
At a Bank of America conference for auto analysts this week, Pipas said the SUV free fall could be tempered if gas prices stabilize next year. Another thing that could reinvigorate SUV sales is General Motors Corp.’s introduction of several new SUVs next year, Pipas said. But sales are not likely to hit the highs they did earlier this decade.
A certain population of drivers will continue to depend on SUVs for their space or towing capability, however, Pipas said.
“The segment is not going to go away. There’s not too many Honda Civics, Ford Focuses or [Toyota] Priuses at Home Depot,” Pipas said. “Our lifestyle and what we do is going to ensure that traditional SUVs remain part of the landscape.”
The Ford Escape was the top-selling crossover in the first 11 months of this year, with 153,000 vehicles sold. Rounding out the top five were the Honda CR-V, Toyota Highlander, Honda Pilot and Chevrolet Equinox.