After reading the headline of this article, most of you might have the feeling that you know the answer. This being a generic topic, plenty of answers are available on the internet. Something which readers believe that they know, and already there are many answers available given me hints that there is no reason to write on this topic. I decided to challenge myself to come up with more logical reasons behind the growing popularity of SUVs. I did some research and am glad to share my findings in this article.
Sports Utility Vehicle (SUVs) origins can be traced to the mid-1930s; that’s nearly half a century after the invention of the modern automobile. SUVs were meant to be driven in rough road conditions and it gained popularity among masses who lived far in the country side, where paved roads were nearly absent. Just before World War 2, SUVs demand increased by the military due to its rugged appeal. However, a downside of SUVs was its uncomfortable ride. But as a matter of fact, SUVs were not meant for luxury & comfort and practicality was the main focus.
For the next 5-6 decades, the SUV’s share globally was in low single digit percentages. In the year 2000, SUV’s share in sales was just 3.7% in Europe, while now it has crossed 40%. In United States, SUVs had share of approx. 20% in the year 2000 which jumped to over 50% last year. Similar trends are visible across India as well. Last year, SUVs contributed close to 40% of passenger car sales in India.
So the question arises what is the reason for this exponential increase in SUV sales and popularity.
Before going in detail on why SUVs gained popularity, let’s understand why SUV sales were so low just a couple of decades back. SUVs had some drawbacks like:
1. SUVs had higher noise, vibration, and harshness (NVH) levels than sedans
2. Poor build quality of SUV contributed to body noise (after some years of usage)
3. Suspension was not so good, and having a higher center of gravity meant that comfort was less with high body roll
4. Boxy shape not liked by all
5. Bigger in size and low aerodynamics led to higher fuel consumption
6. Being bigger in size, maneuvering within the city was difficult
7. SUVs were considered for rough road usage; hence 4-wheel drive transmission was essential, which used to increase the cost
Sedan was considered as executive class. Not many luxury SUVs were available back then. So what changed in last few decades that favored SUVs? There are multiple reasons, let me try to explain.
In order to reduce oil consumption, United States introduced Corporate Average Fuel Economy (CAFE) and made it stringent in the mid-1980s, CAFE norms mandated car manufacturers to ensure certain fuel economy. SUVs were categorized as light trucks; hence SUVs got exemption from passenger car CAFE norms. Many car manufacturers took advantage of this exemption and started focusing on SUVs. In United States, fuel prices were quite low and stable in the 80s and 90s; hence low fuel economy of SUVs was not a pain point for US customers. The success of SUVs in United States was noticed by the world, but initially it was thought that its United States specific phenomenon.
In the late 1980s, automobile technology improved remarkably. A few examples of where SUVs benefited due to improved technology:
• Better suspension reduced body-roll and provided more comfort
• Better build quality, hence no more body squeaking noise after getting older
• Diesel engines became smoother hence, lower noise and vibration
• Features like Reversing camera and sensors made parking easy
• Electric power steering made maneuverability easy
• Most of SUVs had Ladder frame chassis while Sedan had Monocoque chassis. Later on engineers adopted Monocoque in SUVs which made it lighter. To get better fuel economy, many SUVs launched with curve shape (Aerodynamic). All these changes helped to improve fuel economy at the same time those who were not liking boxy shape of SUV had alternative.
After these technological improvements, people gravitated towards SUVs more than earlier. Once they started using it, found the below mentioned edge over sedan (Of course most of them were existing before technological improvements but after improvements, the positives tilted towards SUVs :
• Higher seating position of SUV offers better visibility and sense of control to the person in driving seat
• SUVs offer better road presence thus give macho feeling to user
• Higher ground clearance help to deal with speed breaker and potholes
• Bigger tires of SUVs help to deal with rough roads
• SUVs gives impression of being safer with respect to Sedan
• SUV offers more cabin and cargo space than Sedan
• SUVs are more suitable for tall people (better headroom)
• SUV offer ease of Ingress and egress for all age group
• Many SUVs offer 7 seating option hence suitable for bigger families
Apart from technological improvements, what has helped SUVs to grain traction is growing wealth. The GDP of the world increased from approx. $34 trillion to approx. $90 trillion in the period of year 2000 to 2020. In many parts of the world, the share of young customers has increased. They preferred SUVs because of the reason mentioned above. Another thing which helped SUV sales is consumers attempting to try something new. Those who were using Sedan, Hatchback and Vans wanted to new body type; hence SUVs offered the alternative.
Recently, concept of urban SUV developed (without 4 wheel drive) which is cost effective. Customers who used SUVs for long drives boasted about its comfort; thus positive word of mouth helped SUV sales. We know ‘Success brings success’, the same is applicable on SUVs too. Popularity of SUVs helped to get better resales value, which further helps demand for new SUVs.
Car manufacturers rushed to manufacture SUVs and launched them into the affordable price segment. More choice of SUVs helped all segments of customers. Its win- win situation for all stakeholders.
Of course, Sedan and the hatchback have their own set of advantages, but the purpose of this article is not to compare but to put across the reason for the SUV’s surge in sales.
A few decades back, what was considered as product for specific usage has now emerged as the first choice of most. In my opinion, the dominance of SUV would continue for the coming few decades and then something new would emerge.
Hope I was able to explain that there are multiple reasons behind success of SUVs.
Manoj Tripathi
Author of bestselling non-fiction book "Power of Ignored Skills"
(Disclaimer: The article is the personal view of the author. Data is an approximation to make readers understand the logic)
Source of information: JATO Dynamics, World Bank and Wikipedia
