Rapid increases in gasoline prices have not changed consumer preferences when buying cars in the United States. The most recent sales figures show that, despite inflation and economic uncertainty, motorists in America continue to buy large vehicles.
According to information provided by JATO Dynamics, SUVs and pickups recorded a new record market share in the first four months of 2022, combining for 72.9 percent of total passenger car sales between January and April. By the numbers, it is 3.32 million units out of a total of 4.56 million. Of the two segments, SUVs are the dominant force by a wide margin, accounting for 53.5 percent of the share to 19.4 percent for trucks.
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Combined, it is by far the largest share in the world for these vehicles and another example of how unique the US market is. This also explains why electrification here is struggling to take off compared to other regions, such as Europe or China.
The Fastest Growing Segments
In addition to their dominant position, SUVs and pickups have been market share leaders over the past four years. A year before the pandemic hit global economies, the two segments accounted for 63 percent of total sales from January-April 2019. The market share in 2020 rose to 67.9 percent, and continued climbing to 70.5 percent for the same four-month stretch in 2021.
In total, truck/SUV market share increased by 9.9 points between 2019 and 2022. SUVs are prominent in the group, as the market share for that particular segment hasn't stopped growing. In 2019 it was 46.1 percent, rising to 47.5 percent in 2020 and 52.3 percent last year. This means that market share for SUVs has increased by 7.4 points during these years. Meanwhile, trucks peaked in 2020 at 20.4 percent but slid back to 18.2 percent in 2021. It stands at 19.4 percent thus far in 2022.
Interestingly the growth matches the decline in sedans surprisingly well. The biggest loser in this period is the sedan, dropping from 23.4 percent in the first quarter of 2019 to just 16.3 percent this year. In terms of volume, sedans found 1.25 million new customers in 2019 and only 742,000 this year through April.
Tesla, Hyundai, And Toyota SUVs Are Hot
Strong sales of the Tesla Model Y are part of the SUV's surging market share. Since its introduction in 2020, it has become the most popular electric vehicle in the United States, surpassing the Model 3. In fact, Model Y was the 13th best-selling car through 2022 April, and the seventh most-bought SUV.
The Model Y has thus allowed Tesla to increase its market share in the SUV segment from 0.2 percent in 2019 to 2.7 percent this year. This is the highest increase among all brands that sell SUVs. The Tesla brand was followed by Hyundai, up 2.4 points thanks to the Palisade and latest-generation Tucson.
Toyota, on the other hand, took the top spot thanks to the RAV4, the country's best-selling SUV in 2021, and the Highlander which was fifth-best last year. So far through 2022, the Highlander is up to third on the SUV list.
Electric SUVs And Pickups Shape The Future
This transition to SUVs and pickups from sedans and hatchbacks will continue in the years to come, and electrification will spread. The Model Y is already joined by the Ford Mustang Mach-E, Hyundai Ioniq 5, and the Kia EV6. Forthcoming electric SUVs like the Chevrolet Equinox EV, Chrysler Airflow, and many others should allow this growth to continue.
On the pickup side, the Ford F-150 Lightning is already here. The Chevrolet Silverado EV and the first electric Ram are coming soon, not to mention the Tesla Cybertruck. As more electric models become available, will Americans be persuaded to switch or will they stick with internal combustion for as long as possible?
The author of the article, Felipe Munoz, is the Automotive Industry Specialist at JATO Dynamics.