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Market Swamped With SUVs: Will This Drive US Auto Sales?
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The U.S. auto industry is experiencing robust demand for sport utility vehicles (SUVs) and crossovers. This has prompted automakers to launch models and gain from the growing market share.
The inclination toward utility vehicles for spacious interior with extra seating capacity, ability to tow other vehicles and fuel efficiency has lured Americans to opt for SUVs and crossovers. Per Autodata reports, sales of SUVs and sport wagons gained 6% in 2017 against a 1.8 % dip in overall vehicle sales.
With increasing demand, automakers are introducing improved SUV models under various brands, each catering to specific customer requirements. Automakers believe that specific features will set their models apart.
General Motors Company (GM - Free Report) and Toyota Motor Company (TM - Free Report) already boast minimum 12 SUV models under each brand while others are speeding up to ensure at least one SUV under each division. Per data provided by LMC Automotive, the U.S. auto market is anticipated to witness 90 SUV and crossover models in 2023 in comparison to 65 SUV and crossover models, recorded in 2017.
Upcoming Launches
At the 2018 New York Auto show, many major auto manufacturers unveiled a new set of SUVs.
Let’s take a glance at these SUV launches to determine their impact on the market.
Headquartered in Japan, Toyota has launched an updated version of Toyota RAV4, a best-selling model of 2017. The 2019 model will be available with an option for 2.5-liter four-cylinder engine or hybrid powertrain and is expected to hit the showrooms by 2018 end.
Detroit-based automaker General Motors’ luxury division, Cadillac, unpacked XT4, a sport crossover on Mar 27. Further, the company has plans to introduce a larger SUV in 2019 with three rows of seats to cater to the rising demand.
Michigan-based automaker Ford Motor Company (F - Free Report) unwrapped a three-row mid-sized SUV under its Lincoln brand. The Aviator is the first plug-in hybrid vehicle under the brand to be available with a twin-turbocharged engine.
Earlier this month, Ford announced changes in manufacturing plans to boost its SUV and pickup truck offering as well as gain from the profitable U.S. market segment. In 2018, the company is likely to raise its production targets of two large-sized Expedition and Navigator SUVs by 25% at its Kentucky factory.
German automaker Volkswagen AG rolled out the 5-passenger version of its already existing 7-passenger Atlas Cross Sport vehicle. The company is likely to start manufacturing this new model in 2019 at its Chattanooga, TN plant. Since its debut in 2017, the Atlas SUV has been well-received by customers. The model offers a plug-in hybrid-electric vehicle with 26 miles of battery range and 355 horsepower.
What Lies Ahead
With surging demand for SUVs, a bunch of used-vehicles is predicted to hit the market as customers will return their less-used vehicles at the end of their lease periods. This spurt in availability of used SUVs at low prices will stoke a competitive environment for newer and expensive models.
Also, frequently wheeling out models is not likely to raise unit sales. The idea to spoil customers for choice will not always shoot up unit sales for each model. Further, in order to woo customers with new SUV models in a slow-paced market, auto makers might have to opt for attractive discounts, which in turn might hurt their profit margins.
The long-term growth rate for Toyota, General Motors, Volkswagen and Ford is 6.1%, 8.4%, 18.7%, 10.7%, respectively.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Image: Bigstock
Market Swamped With SUVs: Will This Drive US Auto Sales?
The U.S. auto industry is experiencing robust demand for sport utility vehicles (SUVs) and crossovers. This has prompted automakers to launch models and gain from the growing market share.
The inclination toward utility vehicles for spacious interior with extra seating capacity, ability to tow other vehicles and fuel efficiency has lured Americans to opt for SUVs and crossovers. Per Autodata reports, sales of SUVs and sport wagons gained 6% in 2017 against a 1.8 % dip in overall vehicle sales.
With increasing demand, automakers are introducing improved SUV models under various brands, each catering to specific customer requirements. Automakers believe that specific features will set their models apart.
General Motors Company (GM - Free Report) and Toyota Motor Company (TM - Free Report) already boast minimum 12 SUV models under each brand while others are speeding up to ensure at least one SUV under each division. Per data provided by LMC Automotive, the U.S. auto market is anticipated to witness 90 SUV and crossover models in 2023 in comparison to 65 SUV and crossover models, recorded in 2017.
Upcoming Launches
At the 2018 New York Auto show, many major auto manufacturers unveiled a new set of SUVs.
Let’s take a glance at these SUV launches to determine their impact on the market.
Headquartered in Japan, Toyota has launched an updated version of Toyota RAV4, a best-selling model of 2017. The 2019 model will be available with an option for 2.5-liter four-cylinder engine or hybrid powertrain and is expected to hit the showrooms by 2018 end.
Detroit-based automaker General Motors’ luxury division, Cadillac, unpacked XT4, a sport crossover on Mar 27. Further, the company has plans to introduce a larger SUV in 2019 with three rows of seats to cater to the rising demand.
Michigan-based automaker Ford Motor Company (F - Free Report) unwrapped a three-row mid-sized SUV under its Lincoln brand. The Aviator is the first plug-in hybrid vehicle under the brand to be available with a twin-turbocharged engine.
Earlier this month, Ford announced changes in manufacturing plans to boost its SUV and pickup truck offering as well as gain from the profitable U.S. market segment. In 2018, the company is likely to raise its production targets of two large-sized Expedition and Navigator SUVs by 25% at its Kentucky factory.
German automaker Volkswagen AG rolled out the 5-passenger version of its already existing 7-passenger Atlas Cross Sport vehicle. The company is likely to start manufacturing this new model in 2019 at its Chattanooga, TN plant. Since its debut in 2017, the Atlas SUV has been well-received by customers. The model offers a plug-in hybrid-electric vehicle with 26 miles of battery range and 355 horsepower.
What Lies Ahead
With surging demand for SUVs, a bunch of used-vehicles is predicted to hit the market as customers will return their less-used vehicles at the end of their lease periods. This spurt in availability of used SUVs at low prices will stoke a competitive environment for newer and expensive models.
Also, frequently wheeling out models is not likely to raise unit sales. The idea to spoil customers for choice will not always shoot up unit sales for each model. Further, in order to woo customers with new SUV models in a slow-paced market, auto makers might have to opt for attractive discounts, which in turn might hurt their profit margins.
Toyota and General Motors sport a Zacks Rank #1 (Strong Buy). Volkswagen carries a Zacks Rank #2 (Buy) and Ford has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term growth rate for Toyota, General Motors, Volkswagen and Ford is 6.1%, 8.4%, 18.7%, 10.7%, respectively.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>