SUVs have driven sales and profits in the automotive industry for the past two decades. Their popularity took off in the 1990s in the United States, when Toyota and Honda launched the RAV4 and CR-V, respectively.
Suddenly, these vehicles became affordable, more attractive, and trendy. Until then, the market for high-riders was dominated by boxy, expensive vehicles using old technology, more focused on off-road capabilities than on everyday use.
How The Market Is Doing
Let's start by saying that today the situation is quite good for SUVs. Last year 32.8 million vehicles were sold worldwide. This is two percent more than the total sold in 2021 and corresponds to 45 percent of passenger vehicle sales (including pickups and excluding light commercial vehicles and vans).
Total sales of all types of SUVs (segments A to F) were higher than total sales of all car segments combined (A to F), with 30.4 million units. However, this important growth is slowing down, and automakers are desperately looking for new ways to maintain this important source of profits. And it seems that going back to basics is one of them.
As has happened in traditional car segments, the retro trend is also shaking up the SUV segment. New models have a boxy appearance and in many cases evoke the past through retro design elements that make them more original than traditional crossovers.
Some automotive brands, such as Ford with the Bronco, are bringing some models back to life; others are simply revamping long-lived icons, such as Jeep with the Wrangler or Land Rover with the Defender; still others are creating their own models, such as most Chinese brands; and still others are offering the same old-tech off-roaders of the past, such as Lada with the Niva Legend. Based on my research, boxy/retro/off-road looking SUVs found 1.43 million new customers in 2022.
The volume is up five percent from the 2021 total, with the offer today consisting of 33 different models ranging from the inexpensive Lada Niva, Mahindra Bolero, or UAZ Patriot to the luxurious Mercedes G-Class or the electric Rivian R1S.
The segmentation is obviously subjective, as some of the models included in my analysis might fall into other categories. However, they all have in common the "raw" design elements, square shape, high ground clearance, large wheels (and not necessarily with huge alloy wheels) and, usually, good off-road capabilities.
The Defender case
It is probably one of the best examples of how investing in this trend is paying off. Land Rover scrapped the original Defender in 2016 and reinvented it three years later.
Like the Fiat 500, the new one respects the shape and spirit of the old one and adds technology and comfort. The result? The Defender was the best-selling vehicle globally in 2022 and the only model in the British brand's range to record a positive change from 2021.
Ford also achieved positive results with the latest Bronco, as did Suzuki with the Jimny. They are probably the reason why other brands are starting to reshape their SUVs and make them squarer. The latest Hyundai Santa Fe is a good example of this upcoming trend, which may also encourage other brands such as Jeep, Volvo, Mercedes, and mainstream brands to come up with their own concept of what a new SUV should look like. Time will tell.
The author of the article, Felipe Munoz, is Automotive Industry Specialist at JATO Dynamics.