Of the hundreds of vehicles for sale at the moment, the Jeep Renegade may have the strongest resemblance to a woodlands critter — perhaps a hedgehog, or a bear cub.
The rig is tiny and adorable — attributes not lost on caustic car critics who piled on its 2014 launch as product strategy gone awry. The machine was, they decried, a "baby Jeep"; a Fiat in lumberjack trim. In short, the Renegade was Fiat-Chrysler Automobiles CEO Sergio Marchionne's shameless ploy for young adults Instagramming their way to brunch. But a hearty slice of avocado toast is just the start of the Renegade's day.
Jeep says that of the 278,000 or so Americans who have bought a Renegade, 26% drive their little beast off-road and 12% of them tow something with it. It is both a useful utility vehicle and one that is actually used. In that sense, it's not an outlier.
Something funny is happening to the
big, brash SUV and its smaller sibling, the crossover. They are shifting from an exercise in aesthetics to an instrument of athleisure — a means to a rugged, dirty end, instead of a marketing gambit.
Consider paddleboarding, by all accounts the in-line skating of the 21st century. In the past three years, 1.2 million people have picked up the activity, according to an annual survey by the Outdoor Foundation, a nonprofit trade group. And no, one does not need an
SUV to totter around on a swollen surfboard, but swallowing a six-foot paddle is one of the few things a Volkswagen Golf can't do.
Participation numbers are also up for rock-climbing, hiking, kayaking, hunting and adventure racing, to name a few. All told, almost half of U.S. residents over the age of 6 — some 144 million people — are now involved with some outdoor endeavor.
And then there are the toys. Emboldened by a bullish stock market and catalyzed by cheap credit, U.S. consumers have been spending liberally on big gear. Last year, Americans bought about 270,000 new boats, almost 50,000 more than they did in 2014, according to the National Marine Manufacturers Association. They also bought roughly 442,000 tow-able campers, a 41% increase from 2014, according to the RV Industry Association.
On Outdoorsy, a sort of Airbnb for recreational vehicles, roughly half the renters are under age 40, and 43% of the rigs available to rent are tow-able RVs.
"Millennials don't necessarily like to sit around in camp chairs and get drunk," said CEO and co-founder Jeff Cavins. "They take everything with them: mountain bikes, paddleboard, camera equipment. … There's a massive thirst for adventure."
In short, for the SUV set, it's about far more than Costco competency and a commanding view of the road, as crossover critics have long claimed. None of this will be news to anyone who has set foot in a Whole Foods, Lululemon or a Crossfit "box" (known to normal people as a gym). Despite all our screens — and in some cases because of them — health is no longer just a hobby. The smartest automakers saw this shift coming.
In U.S. sales, SUVs passed traditional cars in late 2016 and have only widened the gap from there. In January, SUVs and crossovers surged to 45% of U.S. sales; fewer than one in three vehicles bought was shaped like a traditional car. Sweetening the switch is that fact that these bigger rigs are generally more profitable. Mr. Marchionne claims his Jeep factories may be able to tow the company's profit up twofold by 2022.http://www.investmentnews.com/wp-content/uploads/assets/graphics src="/wp-content/uploads2018/02/CI114413223.PNG"
Last year, Jeep sold 20% more vehicles in the U.S. than it did three years ago. "It's been a good combination of timing and product attributes," said Scott Talon, head of Jeep marketing. "We keep looking at millennials as these kids living in their parents' basements, but the reality is they're approaching 40 years old, they're buying houses and they're very active."
Subaru, meanwhile, continues to give its customers what they want: the Outback. Spokesman Michael McHale said customers want high ground clearance to drive over rocks and snow, along with a lower roof so they can strap on bikes, kayaks and other outdoor ephemera.
The automaker says its buyers are almost three times more likely than the average driver to ski or mountain bike. Not surprisingly, there are quite a few more Subaru buyers now than a few years ago. The company's unit sales last year represented a 26% bump over 2014.
Other carmakers have been less prescient. Executives who wrote utility vehicles off as a fad propagated by cheap fuel are still playing catch-up. So too are those who pandered to the SUV crowd by not doing much more than repackaging old-fashioned cars with higher suspensions and bulkier body panels.
General Motors Co.'s Cadillac saw annual U.S. sales by vehicle drop by 8% over the past three years. Part of that swoon can be attributed to the luxury brand pushing the needle up on its pricing. But the fact that the marque had only two SUVs on offer didn't help. Now Cadillac, along with
BMW, Tata Motors' Jaguar and Kia Motor Corp., is rushing to make smaller SUVs for the paddleboard set.
Volkswagen's Porsche, sensing danger, introduced the diminutive Macan in 2014. The vehicle is the main reason the German manufacturer notched an 18% increase in annual U.S. sales over the past three years.
Big-rig fever is spreading around the world. Even Europe, where pragmatic drivers have long favored station wagons, isn't immune. LMC Automotive, an industry consultant, estimates that crossovers and SUVs will make up 35% of the global auto market by 2021. In China, it will come close to 40%.
A decade ago, it would have been hard to forecast just how much people would appreciate the look of contemporary crossovers, which a colleague once called "a sea of sexified turtles." It's probably too much to ask of auto executives that they know what people want. But they should know well what people want to do.
