Detroit automakers get needed muscle from crossover sales

[Arizona Slim]

Detroit automakers get needed muscle from crossover sales

September 29, 2005

BY SARAH A. WEBSTER
FREE PRESS BUSINESS WRITER

In the 1990s, sales of hot new SUVs propelled metro Detroit into a sort of economic paradise -- a Golden Era when workers took home thousands of dollars in bonuses and drove around in Ford Explorers, Jeep Grand Cherokees and Chevy Suburbans to load up on the spoils of their success.

But with gas prices topping $3 a gallon recently, and big sport-utility vehicles increasingly out of vogue, the outlook for Detroit has seemed bleak. Production cuts, layoffs and belt-tightening have been the order of the day.

But Ford Motor Co. and crosstown rivals General Motors Corp. and DaimlerChrysler AG have quietly been cornering a new segment of the auto market that may soon bring better days to Detroit.

Detroit is now king of the crossover -- controlling 47.6% of the market -- and local automakers are well-poised to dominate the fast-growing market in the next few years with new vehicles such as the new Chevy HHR, Lincoln Aviator and Jeep Compass.

Crossover utility vehicles, or CUVs as they are sometimes called, look like SUVs and offer the same kind of cargo space in the back. But while SUVs are built like big trucks, the architecture of a CUV is more like that of a smaller car. That helps make crossovers more fuel-efficient, ride more smoothly and easier to get in and out of than an SUV.

Crossover sales are up 42.3% at Ford, 31.3% at GM and 26.8% at DaimlerChrysler through August, compared with the same period a year ago, according to Autodata Corp., a research firm in Woodcliff Lake, N.J. No other Asian or European automakers are making such impressive gains.

"This could very well be the segment that saves them," Art Spinella, president of CNW Marketing Research in Bandon, Ore., said of the crossover market's significance to Detroit-area automakers.

Mike Maroone, president of AutoNation Inc., the largest chain of car dealerships in the country, with 352 new-vehicle franchises, agreed.

"I think the domestics have a very big opportunity here," he said. "It's the next battleground."

The Ford Escape is the most popular CUV on the market. That market also includes vehicles like the Honda CR-V, Toyota Highlander, Chevrolet Equinox and Chrysler PT Cruiser.

Most consumers can't tell the difference between an SUV and CUV, but they are increasingly attracted to the special package of crossover attributes. The improved fuel efficiency, in particular, may be accelerating the popularity of the crossover, Spinella said.

Dallas Strawska, 70, of Madison Heights traded in his Ford Explorer SUV for a Ford Freestyle CUV within the past year and said he likes the cargo space, smooth handling, easy access in and out of the vehicle, and fuel economy.

"You can step in and step out very easy," he said. "You can still dress up and go out in it. It's not like a truck-truck thing."

Marlene Neme, 62, of Warren bought a Mercury Mariner CUV because she said she needed a slightly larger vehicle than her Ford Focus to haul around the cosmetics she sells. But fuel economy was important to her, and an SUV was too large.

"I didn't want anything that big," she said. "I just wanted to graduate slightly."

Continued... http://www.freep.com/money/autonews/...e_20050929.htm

[Arizona Slim]

From the same article, here's what they consider crossovers:


Rise of the crossovers There are 35 crossover vehicles sold in the United States today, and many more are expected. There is some debate about what constitutes a crossover, but Autodata Corp. of Woodcliff Lake, N.J., counts the following vehicles in the crossover category:

•Acura MDX

•BMW X3

•BMW X5

•Buick Rendezvous

•Cadillac SRX

•Chevrolet Equinox

•Chevrolet HHR

•Chrysler Pacifica

•Chrysler PT Cruiser

•Dodge Magnum

•Ford Escape/Escape Hybrid

•Ford Freestyle

•Honda CR-V

•Honda Element

•Hyundai Santa Fe

•Hyundai Tucson

•Infiniti FX 35/FX 45

•Lexus RX 400h/330/300

•Mazda Tribute

•Mazda5

•Mercury Mariner

•Mitsubishi Endeavor

•Nissan Murano

•Pontiac Aztek

•Pontiac Torrent

•Porsche Cayenne

•Saturn VUE

•Subaru B9 Tribeca

•Subaru Baja

•Subaru Forester

•Toyota Highlander

•Toyota RAV4/EV

•Volkswagen Touareg

•Volvo V70XC •Volvo XC90

[paul8488]

The fact that, for example, Mazda has the Tribute and Mazda5 would suggest that they're different beasts. To my mind the Tributeis a small SUV and the Mazda5 is a CUV. But that's splitting hairs, I guess. Still, it's going to get harder to determine what's an SUV and what's a crossover and even what's a wagon!

[MelvinJ]

Originally Posted by paul8488

The fact that, for example, Mazda has the Tribute and Mazda5 would suggest that they're different beasts. To my mind the Tributeis a small SUV and the Mazda5 is a CUV. But that's splitting hairs, I guess. Still, it's going to get harder to determine what's an SUV and what's a crossover and even what's a wagon!

I know what you mean. The one on this list that seems to not fit is the Magnum. I know it's a truck in the EPA's eyes, but when I think crossover, I always associate a somewhat raised stance, whether it's from the suspension or just from a raised roof. The Magnum is squashed on both counts.

But I don't think there are any hard and fast rules on this, so that's just OGO (one guy's opinion).

[Arizona Slim]

I guess crossovers are like pornography - you just know it when you see it.

[paul8488]

Originally Posted by Arizona Slim

I guess crossovers are like pornography...

You hide CUV's from your mom?

[Arizona Slim]

Originally Posted by paul8488

You hide CUV's from your mom?

Yeah, cuz if she see those videos of your mom, she won't let us be friends anymore.

[DanCBJMS1988]

Originally Posted by paul8488

The fact that, for example, Mazda has the Tribute and Mazda5 would suggest that they're different beasts. To my mind the Tributeis a small SUV and the Mazda5 is a CUV. But that's splitting hairs, I guess. Still, it's going to get harder to determine what's an SUV and what's a crossover and even what's a wagon!

That's wierd - I always thought that the 5 was like what the C-MAX is with Ford or like what the Corolla Verso/Vibe is to Toyota - compact MPVs. Full-size MPVs - minivans - might be popular here, but wait till the compact MPVs take over minivan sales. Chrysler's PT Crusier is more MPVish than the Pacifica. But even that is stretching definitions - Peugeot has a 307 SW which they claim is an MPV but in my mind is a wagon. Same with the Signum.

[tgagneguam]

This is refreshingly positive news. I wonder what will happen with GM allegedly set to launch 14 crossovers over the next few years into an as-predicted growing market?

[01cavalier]

Its good to see these doing better, crossovers make more sense to me than a full-size SUV. Ive been thinking of replacing my truck with a crossover when the time comes. Some models dont seem to belong on the list, but with some that are on there, I can easily think of some that should also be added...

[paul8488]

Originally Posted by DanCBJMS1988

But even that is stretching definitions

I think that's the problem here... everyones definitions are different. Some vehicles just 'seem' like crossovers to me (Pacifica, SRX, Mazda5), while other just 'seem' like SUVs (Tribute, Equinox, Cayenne) and others just 'seem' like wagons/hatchbacks (Vibe, HHR, PT Cruiser). At the end of the day, as long as GM has varied offerings, I'm happy.

[nsap]

This is good to hear. Crossovers are certainly going to be the next SUV's, and if they take off as good as SUV's did- this is going to be a very large market.

With GM coming out with 14 new or redesigned crossovers within the next few years, there is a good chance they will lead the segment.

[saturnsteve]

I am sorry, but the Saturn Vue is not a crossover vehicle. It IS an SUV

[saturnsteve]

Originally Posted by Arizona Slim

Yeah, cuz if she see those videos of your mom, she won't let us be friends anymore.

D@mn you guys are getting after it today!

[Infiniti Z350]

I'm pretty sure the Touareg is actually on its own truck platform. I'm not positive though.