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Market Insight: Stand by for SUV ‘baby boom’

Size matters: The Subaru XV is just the latest member of Australia's burgeoning mini-SUV segment.

Mini-SUV sales set to soar in 2012 and beyond as new models reach the delivery stage

Market Insight logo27 Jan 2012


AS OTHER segments struggled, the Australian taste for adventure-seeking SUVs remained strong during 2011 – and will continue to do so, although the shift towards less hardcore, more road-oriented crossover vehicles is becoming more pronounced as the market continues to gravitate towards conventional passenger car alternatives.

The influx of two-wheel-drive compact SUV variants has demonstrated this in recent times, and now a new genre – mini-SUVs – has become increasingly significant within the compact SUV segment, backed by both 4x2 and 4x4 drivelines in most cases although not exclusively, as seen with Subaru’s just-launched 4WD-only XV.

Perhaps overlooking some of the off-road limitations inherent in the small Impreza-based XV, Subaru Australia managing director Nick Senior this week branded the XV’s two-wheel-drive baby crossover rivals as ‘faux-wheel drives’.

Yet that might also reflect how Subaru is hemmed in with its 4WD brand policy – one that Mr Senior has promised will continue for all model lines other than the forthcoming rear-drive BRZ sports coupe.

128 center imageFrom top: Mitsubishi ASX, Nissan Dualis, Hyundai ix35, Kia Sportage, Skoda Yeti, Volkswagen Tiguan, Mini Countryman, Suzuki SX4, SsangYong Korando.

The key point is that car-makers are now moving quickly to capitalise on the global appetite for small road-going crossover vehicles that are distinctly different from light and small cars built off the same platform – hence the change in direction with the latest XV, which is no longer part of the Impreza stable, at least in terms of badging.

A substantial shift in sales volume with this new ‘crossover utility vehicle’ (CUV) sub-segment is likely to be dependent on big-volume brands such as Ford with its Fiesta-based EcoSport (as shown recently in Delhi) and Holden with the Barina-based Encore (unveiled via the Buick Encore in Detroit), both of which are expected here in 2013.

Before then, the compact crossover segment – which currently includes the Mitsubishi ASX, Nissan Dualis, Hyundai ix35, Kia Sportage, Skoda Yeti, VW Tiguan, Mini Countryman, Suzuki SX4, SsangYong Korando and Chery J11 – will continue to gather momentum as new models and variants come on to the scene.

Based on an entry point of 4450mm overall length or less, Jeep’s newly resurrected Compass also fits into the category, while the all-new ASX-based Peugeot 4008 and Citroen C4 Aircross are due here in the second and third quarters respectively.

The ASX itself is due for a significant upgrade in the second half, a 118TSI petrol version of the Yeti is expected before mid-year and the Dualis range is set to expand with the introduction of a diesel engine.

Further afield, Opel Australia is expected to launch its version of the Encore, known as the Mokka, in 2013, and Renault has designs on a sub-Koleos CUV – as previewed by the Captur concept in Geneva last year.

An influx of thoroughly modern, value-oriented Asian micro-SUVs is also anticipated before long, with SsangYong, to name one, set to bolster its standing in the segment after showing its production-oriented sub-Korando XIV-1 at last September’s Frankfurt motor show.

Suzuki likewise showed an intriguing sub-Vitara SUV at the recent Delhi auto show dubbed Concept XA Alpha.

Toyota, which tends to dominate the SUV sales charts, decided against offering the sub-RAV Urban Cruiser in Australia in favour of the boxy Rukus passenger car. But don’t expect the overall market leader to be left behind in what is rapidly becoming a key segment.

While there are differences in interpretation over what constitutes a mini-SUV – VFACTS, for example, categorises SX4 in the small car segment – the 10 compact crossovers that on our reckoning fit into this sub-segment accounted for 41,300 sales in total last year.

Including SX4 into the compact SUV segment, the mini-SUV genre last year accounted for a third (33.5 per cent) of total sales in the all-important segment, a significant figure and one that should increase this year as new metal continues to arrive, as vehicle supplies improve after unforeseen setbacks in 2011 and as models such as Yeti, J11 and Korando have a full year on sale.

Hyundai’s ix35 proved to be a standout performer last year, racking up 11,487 sales (up 59.5 per cent) to be fourth overall in the entire compact SUV segment, deferring only to the bigger Subaru Forester, Toyota RAV4 and Nissan X-Trail.

For Nissan, 9214 Dualis sales marked an impressive 39.8 per cent increase (setting up 21,303 combined Dualis/X-Trail sales, with the latter also up 23.5 per cent), while Mitsubishi found 6430 homes for ASX to compensate for – and perhaps to some extent cannibalise – slower sales of the bigger, ageing Outlander, which was down 11 per cent to 7599 sales.

Volkswagen was down 2.4 per cent with Tiguan, which nonetheless passed the 6000 mark, while Kia was hamstrung with limited supplies of Sportage, leaving it with 3602 sales for the year but plenty for Kia Motors Australia to feel positive about.

Suzuki managed 1907 SX4 sales, while Skoda will be up around that mark at the end of the year if the Yeti (launched in October) maintains its current monthly average.

The VW-owned brand will, of course, be striving for more than that as it seeks to double sales overall in 2012 to around 7000 new vehicles across the board.

Launched in February last year with the nation’s lowest SUV pricetag of $19,990, Chery’s J11 recorded 1114 sales in 2012 without sales from Victoria due to its lack of electronic stability control.

All J11s that had landed in Australia up to around October last year were also subject to a safety recall, about the same time the Chinese mini-SUV received a poor two-star crash-test rating from the Australasian New Car Assessment Program (ANCAP).

Chery is working on a significant safety upgrade for the vehicle, which should materialise this year. An improvement in this area is clearly significant for Chery to make more of an impact on the segment.

SsangYong fell well short of its targets with the new Korando, managing only 623 sales for the year after forecasting 170 a month at its February launch.

Finally, BMW’s Mini brand achieved 428 sales for its supply-restricted premium Countryman crossover, which was launched early last year and experienced strong initial demand from Australian buyers.

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