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Car/SUV hybrids find niche


Cox News Service
Tuesday, August 10, 2004

ATLANTA — Some people are looking for better gas mileage or less bulk and better handling. Others just want the trendiest thing on the market.

Whatever their motives, a growing number find what they're looking for in a crossover sport utility vehicle — part car, part SUV.

Crossovers sold at a rate almost five times the auto industry average in July, and they're clipping the sales of standard SUVs.

Crossovers comprised a record-high 40 percent of all sport utility sales in the second quarter, according to the Power Information Network, a J.D. Power and Associates affiliate. They claimed about 11 percent of the total new-car sales market during the same period.

Both those amounts are up from negligible percentages in 1998.

Carmakers are pushing out new models to take advantage of the trend. When a handful of crossovers like the Toyota RAV4 hit the market in the late '90s, they were billed as tiny SUVs.

Now there are 31 vehicles that fit the crossover utility vehicle, or CUV, category as defined by Ward's Automotive Reports, the industry's primary tracker of sales. They range from the strong-selling Honda CRV to new quasi-car designs such as the Nissan Murano and Chrysler Pacifica.

The definition of a CUV is not set in concrete, but many in the industry consider them vehicles with SUV features built on a car frame.

CUVs don't have the same durability and towing capacity as traditional truck-based SUVs, but they can meet the needs of the typical, active family of five — or even seven, with beefier models.

Atlanta resident Terri Molafky bought her Acura MDX when her family became too much for her Acura Integra.

She wasn't eager to upsize to an SUV because of handling and environmental concerns, and image concerns steered her away from a minivan.

"We never considered going huge," Molafky said. "This was the only option we considered."

Back when sport utilities flooded the market in the early-to-mid 1990s, buyers who preferred less bulk and more luxury didn't have that option.

"There wasn't the crossover option then," said Tom Libby, director of industry analysis for the Power Information Network. "There wasn't that choice in an SUV. Now, brands that don't have one are developing one."

Toyota blazed the trail with its 1996 RAV4, and Honda quickly followed with the CRV. Few manufacturers introduced crossovers before the 2001 model year and, even now, the market is dominated by foreign makers.

U.S. manufacturers are working to change that — a move that promises to move CUVs further from a niche to mass market.

The Chrysler Pacifica, introduced in the 2004 model year, is widely viewed as contributing to Chrysler Group's ability to outperform its domestic counterparts in recent months. General Motors is angling for a piece of the action with its 2005 Chevrolet Equinox.

"It's a vehicle now where we can be competitive in a market we weren't before," said Johnny Farrar, general sales manager at Jim Ellis Chevrolet in Chamblee.

As crossover options increase, their appeal promises to widen — bolstered by rising gas prices and environmental concerns.

CUVs typically get better gas mileage than standard SUVs and generally don't carry the same environmental stigma as their fuel-guzzling cousins, industry experts say.

A Toyota Highlander, for instance, gets 22 miles per gallon in the city and 27 on the highway, while the 4Runner only gets 17 and 20.

Crossovers also benefit from their relative scarcity, though that may wane as production picks up and new models become more common.

"The SUV gave people utility but with a better image," said Wes Brown, a partner at industry analyst Iceology Inc. "Just as any fashion statement has its time, I think that [image] aspect of it has slowed. Now we're seeing this crossover segment starting to explode."

The Toyota Camry and the Ford F-Series trucks alone generate 2.6 percent and 5.2 percent of new sales, respectively. The Honda Accord and Civic aren't far behind.

Those beefy sales numbers — combined with the models' prevalence on the used-car market — mean a Camry owner is much more likely to see his car sitting next to him at a stoplight than is a driver cruising in a Nissan Murano.

Art Spinella, president of CNW Marketing Research, reports that would-be buyers are driven less by necessity. About 6 percent of households now have more cars than drivers, and the average trade-in vehicle is only 4 1/2 years old, vs. 8 1/2 in 1990, according to CNW.

"Cars that are being traded in are perfectly usable," Spinella said.

The trend plays into the CUV segment's hand, he said.

"They're taking sales away from sport utilities, especially the large sport utilities," Spinella said.

"And again, it's because people are looking for something new."

Elyse Ashburn writes for the Atlanta Journal-Constitution. E-mail: eashburn@ajc.com

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