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Market Insight: When small becomes big

Slippery slope: The small-car market has been swept aside as small SUVs dominate the showrooms.

How niche models spawned a new SUV segment that swamped the hatchbacks


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5 Jul 2021

AS INEVITABLE as the SUV avalanche that overtook the passenger car market in 2017 is the current sales convergence of small SUVs and traditional small cars.


The outlook is all about the SUV. By the end of this year, the pint-size SUV segment should overtake the combined micro, light and small passenger-car sectors, starting a process of erasing the long-standing dominance of genres such as the hatchback.


One word – hatchback – has defined the small-car market since the 1970s and now largely represents the small-SUV segment.


For what is a small SUV if it not a hatchback? What is a medium SUV if not a station wagon?


Hyundai was the first car-maker to capitalise on the baby SUV sector, not by being the originator or instigator but by boldly dumping its i20 hatchback and replacing it with what we now loosely call an SUV, the Kona.


Then, to cement the SUV profile onto its model list, it replaced the even smaller i10 (which was never sold in Australia) with the Venue. For buyers visiting a Hyundai showroom, the quest for a hatchback led them unswervingly to an SUV. There was simply no other option.


The path to the dominance of the small SUV category by the 11-year-old Mitsubishi ASX – itself based on the platform of the now departed Lancer sedan – shows that age doesn’t weary the desire of motorists to secure these pseudo off-roaders.


In the ASX’s case, price has also played a big part in its success, as does its hatchback functionality and high-riding stance that makes entry and egress so comfortable for older drivers.


So successful is the ASX that Mitsubishi has no intention of replacing the Lancer, departing the small-car segment secure in the knowledge that the ASX and larger Outlander will seal any gaps.


The rollout of small SUVs and the enveloping of the small-car market (including micro and light in later years) is reflected in the number of models available since the trend really started to take hold in 2010.


In that year, there were 11 small SUV models on the Australian market including one Chinese – the Chery J11 – and the three main players, Hyundai’s ix35 (which evolved into the Tucson), the Nissan Dualis (which became the Qashqai), and the evergreen ASX.


Three years later, there were 20 SUVs in the small category with additions including the Subaru XV and high-end Audi Q3, the latter showing that luxury car-makers were aware of the downsizing trend in association with the SUV swing.


Move to 2015 and there were 31 models. The entrances of the BMW X1 and Mercedes-Benz GLA-Class proved the Germans are listening while the sales movement – up 21.5 per cent on 2014 – had attracted more players including three each from Jeep (Renegade, Patriot and Compass) and Peugeot (2008, 3008 and 4008).


In 2017, the year of the SUV when the genre overtook passenger-car sales, there were 33 models of small and light SUVs available, and sales were up a modest 6.0 per cent on 2016.


But for buyers, it was toyland. New entrants included the Infiniti Q30/QX30; Audi added the Q2; Toyota introduced its (then) smallest SUV, the C-HR; there were four Suzukis (Vitara, S-Cross, Jimny and Ignis); and the Chinese added the MG ZS and Haval H2 while sticking with the Chery J11.


By 2020, the SUV segment had defined itself by size, with a total of 46 models comprising 14 in the light-SUV segment and 32 in the small-SUV corner.


It was a year when Hyundai released the Venue, SsangYong had the Tivoli, and buyers could select from two Citroens, the C3 Aircross and C4 Cactus.


Upmarket brands also increased the tempo. Jaguar launched its E-Pace, BMW the X2, Lexus came out with the UX and Volvo released its XC40. The Hyundai Kona was the top seller and the ASX – then a decade old – was second favourite.


The trend remains strong for 2021. In the six months to June, the light and small SUV sector has already sold 109,954 units which represents almost 79 per cent of the total of its best full year of 2019 when 139,250 units were sold (COVID-affected 2020 had 50,052 sales).


Adding to the rosy outlook for the small SUVs are the new players. Over 2021, the sector has so far gained the Kia Stonic and Niro, Haval Jolion and Mazda MX-30.


For small SUVs, it will be a big year.

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