Tuesday, June 20, 2017

An Explanation For The Crossover Craze



Alexander Carabitses


(Image credited to Nissan)
The automotive industry is one that experiences many fluctuations.  It is a cyclical industry in terms of consumer buying habits and product preference.  As of late, the consumer favorite is the crossover, an SUV that handles like a car and is actually built on a car platform.  However, the two questions on the minds of most enthusiasts are why in the world this vehicle is popular and why it come about in the first place.  Let's take a look.

The story begins with a vehicle that I have previously written about, the station wagon.  Loved for its utility, the station wagon essentially became the staple vehicle of families, as well as those who loved to explore the great outdoors.  However, there eventually arose a stigma surrounding station wagons.  Not only were they deemed boring, uncool, and gas-guzzling family vehicles that a couple would be forced to drive when they decided to create human life, but the car was not well favored by Gen-X'ers that grew up taking long road trips in the back of the family station wagon.
(Image credited to Buick)

At the same time, the growing sizes of families were pushing for the creation of a vehicle that could carry as many people as a station wagon, while being more functional.  Since the Detroit Big Three were still on top of the world in the early-to-middle 1970s, they decided to develop a vehicle to fulfill this need.  GM canceled the project for an unspecified reason, while Ford continued to move along with the program.  That was until Henry Ford II killed off the project, thinking that its front wheel drive platform would lead to the creation of a low-profit margin, niche product.  Shortly thereafter, Ford fired Lee Iacocca and Hal Sperlich (two prominent Ford executives at the time, with Iacocca serving as president of the company) and both of them went to work at Chrysler.  Since Chrysler already had a FWD platform and the two executives had brought the black books containing the specifications for the now killed Ford project, the company was able to develop the new family vehicle in 1984: the minivan.
(Photo taken at the US National History Museum)

The success of the minivan ended up being unprecedented, with the vehicle essentially saving Chrysler in the 1980s.  Many automakers, both American and Japanese, tried to copy the formula, with some being more successful than others. Then, in 1990, just as the second generation of Chrysler minivan was coming to market, Ford launched the first generation Explorer SUV, which triggered other automakers to develop off-road oriented family vehicles.  In the end, the entire movement ended up being a passing fad, and although the vehicles sold consistently well alongside the ever practical minivan, the idea had gone stale by the mid-2000s. It may have taken a decade-and-a-half, but consumers finally realized that these tanks could easily roll over; they also began to mind the poor fuel economy.  Meanwhile, the soccer mom stigma had begun to deteriorate the minivan market, and early Gen-Y car buyers wanted something different.  Fortunately for them, one Japanese automaker knew that this would happen, more than a decade earlier.
(Image credited to Ford)
In 1994, Toyota launched the first generation RAV4 in Japan.  Based on the compact Corolla platform, the car offered the appearance and practicality of an SUV with better gas mileage.  It sold well all over the world, and still stands as one of Toyota's best-selling models.  Although it took some time, other automakers caught on, replacing their off-road oriented gas-guzzlers with crossover.  GM's Lambda-based crossovers, the current generation Ford Explorer, and many others like them started flooding the market, with the majority being based on car platforms.  Today they come in the same size classes as cars, and for that reason, they've started to slowly outpace the sales of passenger cars.  While the remaining traditional SUVs continue to sell well, minivans and station wagons have become niche models.
(Image credited to Toyota)

Why are they popular?  Well, consider that these vehicles offer the higher ground clearance that people came to love about SUVs, optional AWD, a great deal of utility, and better gas mileage.  Otherwise, I don't have a good answer, nor does anybody else.  When one thinks about it, the majority of subcompact, compact, and midsize crossovers are either station wagons or hatchbacks that have a raised ride height and a bolder look.  With those "simple changes" one can make a lackluster product suddenly sell like hotcakes.

So here we are in the crossover dominated era, but despite the hype surrounding these vehicles, I predict that it will be short lived.  I believe this because of an established trend that dictates the moves that every company in the industry makes: changing consumer preferences.  When reading the above paragraphs, you may have noticed two major consumer trends.  First off, family vehicles tend to go grow stale within a decade's time (mostly because it takes this long for people to see beyond the frills of their family cars), at which point something else tends to come along and displace the status quo.  The second trend has to do with the fact that no adult wants to drive around in the same vehicle that they rode in the back of in his or her youth. This is why the minivan proved to be more popular over the station wagon in its heyday, and why the crossover is more popular than the minivan is today.  The current crop of kids riding in the back of their mom's Toyota Highlander will never buy that vehicle.  They may buy another Toyota vehicle, but certainly not that one.  For these reasons, I feel confident that the success of the crossover is not going to last in the long run, and while the body style may not completely fall out of fashion, within the next decade-and-a- half, I think that the vehicle won't be as popular as it is today.

Thank you for reading and have a good week.

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