The double-edged sword of the SUV success
How can this popularity be explained? In fact, consumers’ tastes have hardly changed. They have always been attracted to high-riding vehicles that give a sense of security. But they used to be 4x4s, bigger than traditional cars and more expensive thanks to their four-wheel-drive system. They were a niche market, with brands like Land Rover and Jeep.
In 2007, Nissan broke the code. “We were in a phase of product renewal and did a study on unsatisfied consumer needs,” says Nissan West Europe marketing director, Coralie Musy. “The study showed they liked the high seating position of 4x4s, but also the ease of use of traditional cars.”
The result of this marketing study was the Nissan Qashqai. It looked like a 4×4, but shared its technical components with a classic hatchback. Not necessarily 4×4 and no specific suspension elements, so no offroad capacities. By sharing components with normal cars, costs were reduced.
The first reactions of the specialized press were skeptical. This feeling is shared by automotive study bureau Cetelem director Flavien Neuvy. “Buying a SUV is a choice of the heart. Buying a bigger, heavier, more expensive car that needs more fuel than an equivalent car in the same segment is a bit irrational.”
And yet, it worked. Nissan saw its total vehicle sales in Europe go from 290.000 to 540.000 between 2007 and 2015. The competition followed, like Renault, which launched the Captur in a lower segment. It was a success.
Not all carmakers have got into SUVs that early. “We had not completely identified the size of the phenomenon,” says Peugeot product director, Laurent Blanchet. The brand has made up for its late arrival, with successful SUVs like the 2008, 3008 and 5008. One in four SUVs in France is now a Peugeot.
With a differentiating design, it is possible to get good sales results in this very competitive segment. The offer is huge. Jato Dynamics says the consumer has a choice between 115 SUVs today. In the first quarter of 2016, there were just 75.
The battle is fierce. Carmakers have to be present in the segment. “Not being there means losing market share,” says Flavien Neuvy. Even more so because the margins on SUVs are higher than on traditional cars. Buyers, attracted by the cars’ silhouette, don’t ask for big discounts.
At the same time, SUVs represent a real threat to carmakers. Heavier and bigger, but also less aerodynamic than traditional passenger cars, they are less fuel-efficient. Meanwhile, stringent CO2 limits in the EU make for more frugal cars.
However, the success of SUVs and the decline of diesel sales have made the CO2 emissions in the EU go up for the past two years. The consumer doesn’t seem to care. But manufacturers need to worry. The more SUV sales rise, the more difficult it will be to get under the CO2 limit set by the EU.
In the short term, car manufacturers electrify their models in a quest to reduce CO2 output. PSA is multiplying its electrified drivetrains, VW is launching a massive electric plan and Nissan will offer an electric version of its small SUV Juke. A must.
Weight eco malus
However, in a strategic government report in France, the idea of an eco-malus based on weight is introduced. This might change things. At the moment, the French eco-malus, which can cost up to 10.000 euros, is based on CO2 emissions of a car.
The heavier cars are, the more energy they need, according to the report. Heavy SUVs are in the firing line. An eco-malus linked to weight might kill the electric SUV in the country even before it has been launched.