The Rise of the Compact Utility Vehicle, Why It Means Big Changes for You

Back in the day, (that is 2015) the biggest selling segment in the auto market was four door sedans. With higher fuel prices, buyers were looking for strong value and quality, shifting towards models like Camry and Accord. Then something changed. That something was the introduction of CUVs – compact utility vehicles – established as cross-overs between sedans and SUVs. With the CUV, the buyer can have everything that they wanted in a car – same price, same gas mileage and same amount of space – but with the build of an SUV.

As a segment, Non-Luxury Compact CUVs now lead the market as the highest selling segment within the whole state of Alabama, Central Tennessee, and the Florida and Mississippi Gulf Coast region. The segment is growing within a relatively flat market; therefore, the share is being take away from other segments.

While this year is the first year Compact CUVs overtook Traditional Mid-Size, it is important to know this segment has seen aggressive growth over the past three years. Spurred by the astronomical growth in market share and release of Nissan Rogue, which was the number one growth vehicle year over year, this segment looks to be hitting its stride going into 2017. The opposite can be said for the Hyundai Elantra and Sonata, both having lost significant share and unit sales.

The trend that continues is the lack of new buyers entering the automotive market. This leaves the unanswered question, where will the CUV buyers of 2017 shift from? The answer is simple: they will come from the dealerships that fail to deliver a consistent advertising message to potential buyers. With an increasingly longer buying cycle – studies show up to six months or more – consistency is paramount. Holiday sales used to work (and still do for older segments), but what we’re finding is that millennial buyers want more information, such as comparisons, service requirements, technology packages and the long-term costs of ownership. This is changing the cyclical buying cycle that has been in place for almost a century, making it a necessary to constantly be communicating with potential buyers.