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News - Market Insight - Market Insight 2020

Market insight: Baby SUVs shine as market darkens

Big lift: Cars like the Mazda CX-3 (left) have helped keep the light SUV segment buoyant in an otherwise down market.

Huge shake-up in light hatchbacks has decimated sales while small SUVs surge

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13 Oct 2020

THE power of the SUV genre has become so magnetic that the high-riders are the go-to model for new-vehicle buyers and has led to savage sales repercussions for traditional sedans and hatchbacks.

 

In September, the light passenger-car segment showed just how buyers are ignoring small, economical and budget-priced new-vehicle transport.

 

Sales for the sub-$25,000 baby hatches and sedans is down 46.3 per cent year-to-date and in September, dropped 39.6 per cent compared with the same period in 2019.

 

But it’s nothing to do with the size or economy or pricing that is steering buyers away from pint-sized passenger car – it’s the offerings available in the light SUV segment. Most light car manufacturers now also make light SUVs; a finger in each pie, so to speak.

 

The light SUV segment for the month of September was up 11.4 per cent – the only segment to post a positive in a sea of red. That represented 255 extra sales on the same time last year.

 

For the year, it’s 1.4 per cent ahead (or 263 more vehicle sales) of 2019 and again, the only segment to show a win in both periods.

 

Once the darling of the new-vehicle market, the SUV segment has fallen into the same malaise as the rest of the market.

 

The total SUV segment is down 14 per cent year-to-date and, for September, down 22 per cent on 2019.

 

But with its healthy sales, the light SUV sector is keeping the SUV segment – and the new-vehicle market – more buoyant than any other.

 

Its rise to the cream of the industry happened for a series of events, particularly the new-generation of savvy light SUVs led by the Hyundai Venue, and the withdrawal of light sedans and hatchbacks as manufacturers threw their hands in the air and put their efforts into SUVs.

 

There are 20 light hatchbacks and sedans listed on the market this calendar year to date. As sales dwindled, now only 11 remain as the rest were withdrawn from the market including the Ford Fiesta (only the ST performance hatch remains), Holden Barina, Renault Clio and Zoe, Peugeot 208, Toyota Prius C and Hyundai Accent with the Honda Jazz and City either gone or on the way out.

 

The light SUV has 13 players including the recent arrivals of the new Ford Puma and Volkswagen T-Cross, while some to leave the showrooms include the Citroen Cactus, Ford EcoSport, Holden Trax and Renault Captur.

 

There is a new Captur coming next year and the new Citroen C4 expected next year may include a small SUV called a Cactus.

 

One important incoming light SUV is the Kia Stonic (Hyundai Venue platform and similar size) due here later this year.

 

This SUV sector is dominated by the Mazda CX-3 with 51.6 per cent of the market (year-to-date figures) and 9825 sales this year. To show how dominant this model is, the second-best is the Hyundai Venue with 14.1 per cent of the segment and 2681 sales to date.

 

Buyers get into an SUV because of the assumed safety (it sits higher), flexibility (it is a wagon) and style (everyone on my street has one and I have FOMO).

 

The light SUV satisfies these three parameters and also comes at an affordable price (the cheapest is the Suzuki Ignis at $17,990 plus costs).

 

Pricing is important in any market but especially in the Covid-19 era as buyers seek new vehicles to ensure the security of personal mobility.

 

The sector could further improve sales on the back of future new models but is more likely to retain its strength because of the style and budget-price factors.


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