Millennials to Become Primary Target Segment of Subcompact SUV & Crossover Market
--Subcompact SUVs and crossovers can fill voids in the automotive industry with new features, finds Frost & Sullivan
MOUNTAIN VIEW, California, Aug. 19, 2015 /PRNewswire/ -- Makers of subcompact sports utility vehicles (SUVs) and crossovers are rolling out a host of new designs and benefits to draw in early drivers, mid-to-late 20-year olds, and adults looking for a second household vehicle. The overall design and highly attractive technology, price points, safety and fuel efficiency are expected to resonate deeply with the needs of not only millennials and young drivers, but also customers aged 50 and above.
New analysis from Frost & Sullivan, Strategic Analysis of the Global Subcompact SUV and Crossover Market (http://www.frost.com/nee0), finds that between 2012 and 2014, the market grew by more than 40 percent. Total sales in 2014 stood at 3.2 million units from 62 models, and this is likely to increase to 7.4 million units from 22 additional models in 2022. Robust growth is expected from the Asia-Pacific market between 2015 and 2017, after which, Europe will emerge as a stronger contributor.
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"The key to market success is to provide customers with strategic balance between manufacturer's suggested retail price/selling price and trendy design cues," said Frost & Sullivan Automotive & Transportation Consultant Sujeesh Kurup.
Subcompact SUVs blend the features of subcompact cars, compact cars, mid-size cars and compact SUVs, to create a new segment of cars with fresh design language, small footprint, moderate miles per gallon (mpg), and occasional off-roading capability. Automotive original equipment manufacturers (OEMs) that create a hybrid variant of subcompact SUVs will be trailblazers in this segment.
While subcompact SUVs' product benefits are eminently marketable, future sales will depend on OEMs' lightweighting skills, as well as the cars' superior safety features and powertrain technologies. Currently, the biggest drawback of the vehicles is their low mileage of 25 mpg. With the adoption of new powertrain and lightweighting technologies, fuel efficiency is expected to rise to more acceptable levels.
As automotive OEMs are consolidating their global platforms, the curb weight of the subcompact SUVs and crossovers must decrease, while the combined mpg must improve to more than 30 mpg by 2022.
"Finding the optimal balance between platform consolidation, lightweighting and vehicle fuel may well prove critical to OEMs' growth," observed Kurup. "They need to focus on these areas not only to meet their business goals, but also to be able to offer customers a great value proposition."
Strategic Analysis of the Global Subcompact SUV and Crossover Market is part of the Automotive & Transportation (http://www.automotive.frost.com) Growth Partnership Service program. Frost & Sullivan's related studies include: The Future of Intelligent Mobility and its Impact on Transportation; Future of Parts and Service Retailing in the Automotive Aftermarket; the GPF Market for Passenger Cars in Europe and North America; 2015 Indonesian Automotive Market Outlook; and the Connected Vehicles Market in Japan. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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Strategic Analysis of the Global Subcompact SUV and Crossover Market
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Clarissa Castaneda
Corporate Communications – North America
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