SUV share has hit 51% of the market
One of the barometers of consumer behavior watched closely across the industry is light vehicle registration activity. Car registration is when the car dealer sells to a customer.
In this recent analysis, Tom Libby, IHS Markit’s loyalty principal, reviewed the latest new light vehicle registration data, which reflects activity in the US market through July.
First, SUV share has hit 51% of the market — reflecting the first time in recent history that one body style has captured half of the US market. Secondly, pickups are even more popular than sedans at nearly 20 percent. Not surprisingly, the sedan body style continues to lose share, and through July, saw their lowest share in the industry since 1987 at just over 19 percent.
Given COVID-19 and its impact around the country during the second and third quarters, it will be interesting to see if these trends adjust now that more states are back to business in a more normal environment.
The US light vehicle sales forecast for the full year 2020 is estimated at about 14 million units, down approximately 18% from 2019 levels.
It’s well known that there’s been an ongoing shift in US consumer preferences toward sport utility vehicles; however, what may not be as widely recognized is the magnitude of this change so far this year. A recent analysis of IHS Markit’s new vehicle registrations through July 2020 (the most recent available) finds sport utilities account for 50% of all new vehicle registrations, up from 31% ten years ago (a 61% increase).
If today’s mix continues for the remainder of 2020, it would mean not only that every other US buyer is acquiring an SUV, but it also would mark the first time since 1987 that one body style has captured half of the US new vehicle industry.
This movement toward sport-utilities is more acute in the luxury space where SUV share currently stands at 64%. Together with sedans (with a share of 27%), these two body styles account for 91% of all new luxury vehicle deliveries. The lack of pickups in the luxury space, by default, drives up the shares of other body styles.
Market share for mainstream pickups has also grown, driven in part by intense competition among the domestic manufacturers that dominate this space. Through July, pickups account for 19.9% of new vehicle registrations in the US, outpacing sedans for the first time in recent history. Half-ton full-size pickup share has grown from 8.8% in 2014 to 11.6% July 2020 CYTD, and three quarter/one-ton full-size pickup share has increased from 3.3% to 4.1% over the same timeframe.
Midsize pickups, which typically do not garner as much publicity as their larger stablemates, have experienced tremendous growth since 2014, with their share more than doubling from 1.5% to 4.2%. Ranger’s recent re-entry has increased interest in this category and provided another challenge to the ubiquitous Tacoma.
Sedans continue to lose ground. From a peak of 44.8% in 1991, sedan share has plunged to just 19.2% through July, the lowest share for the segment since 1987.
SUV/CUVs and pickups are now accounting for more than two-thirds of all US new vehicle registrations. Some OEMs have moved to align portfolios.
Will future trends include fragmentation within these categories?