As more models become available, compact vehicles continue to gain a greater share of the US new vehicle market, according to the Power Information Network (PIN).
Go deeper with GlobalData
The compact vehicle share of the total new vehicle market rose from 27.9% in 2005 to 31.2% in 2006, according to a PIN analysis that excluded fleet sales. Six years ago, in 2000, compact vehicles accounted for just 23.8% of the market.
The share of midsize vehicles dropped from 42.8% to 40.4%, while the share of large vehicles declined from 29.3% to 28.5%.
“Growth in the compact vehicle segments is being driven, in part, by an increase in the number of models and the popularity of small crossover vehicles,” said PIN analyst Tom Libby.
In addition to an increase in the number of compact models available, price, styling and functionality are also factors contributing to the compact vehicle share growth. Libby added that petrol prices in 2006 likely caused some consumers to shy away from larger cars and trucks.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“It will be interesting to see if prices stabilise at or below $US2 a gallon, whether we see a return to larger vehicles,” he said, adding: “I don’t think we will.”
Due to their rise in popularity, compact vehicles are moving off dealer lots more quickly than they used to and much quicker than the typical new vehicle. Five of the seven segments with the fastest turn rates in the industry in December 2006 were compact vehicle segments, with the compact premium CUV (28 days) and compact basic car (35 days) segments ranking one and two, respectively, in the industry on this measure.
In addition, the turn rates for these two segments declined dramatically from December 2005 to December 2006, even though the industry’s turn rate climbed from 55 days to 67 days over the same period. Seven of the 12 new models with the fastest turn rates in the industry in December – among more than 290 models – were compact vehicles.
Segment loyalty of compact vehicle owners, particularly in the non-luxury sector, is increasing as well. In the fourth quarter of 2006, 56.4% of all owners of non-luxury compact vehicles traded for another one – up from 51% in the fourth quarter of 2005.
The percentage of owners of both midsize and large non-luxury vehicles trading to a compact vehicle rose as well, from 20.8% to 25.8% among owners of midsize non-luxury vehicles and from 7.0% to 9.1% among large non-luxury vehicle drivers.
Seven compact models were either introduced or confirmed for the US market earlier this month at the Detroit motor show. Introductions focused on new smaller crossovers and more conventional small cars.
The volume compact model introduced at the show was the restyled Ford Focus, the US version of which retains the same platform as its predecessor but with substantial upgrades to the exterior and interior styling. The Focus also will be one of the first Ford models to offer the Microsoft Sync in-car digital system.
The Nissan Rogue is a noteworthy new crossover that also made its debut in Detroit. With a strong resemblance to its larger sibling, the Murano, the Rogue will compete in the compact CUV market this autumn with the Saturn Vue, Ford Escape, Honda CR-V and Toyota RAV4, among others.
“We expect this segment to remain intensely competitive and under pressure from midsize crossovers as well as small conventional hatchbacks and sedans,” Schuster said. “Overall, we expect it to maintain share near 8.5% of the market over the next two years.”
The concept version of the Volvo XC60 was also introduced at the Detroit show. This model is the near production-ready sibling to the larger XC90, carrying the smaller theme to the premium market. Small crossover entries from Infiniti, Lexus, Cadillac and Audi are also in the pipeline, making this a significant growth segment.
Volume in this segment is expected to quadruple, from 40,000 units in 2006 to 160,000 unit by 2008, according to Schuster.
