Off-Roaders Getting Softer By Demand

  • Many consumers seeking cheaper running costs
  • Segment under increasing pressure from critics across Europe
  • High running costs and tougher legislation bring a new breed of SUV to the market

JATO Dynamics, the world’s leading provider of automotive data and intelligence has commented that the market for SUVs seems to be undergoing a period of transition.

Still a buoyant segment, the 4x4 and SUV market has for many years enjoyed a period of unprecedented growth, with an increasing appetite from consumers for the chunky, purposeful looks and high driving position associated with that type of vehicle. In many markets the vehicles also enjoy a certain social status that continues to draw consumers from areas of the market that have no apparent purpose for off-road capability.

However, JATO has been tracking trends within the segment and is of the opinion that manufacturers are now responding to the changing demands of consumers. Many ‘new-to-the-market’ SUVs are noticeably smaller than the older, established models and many now only offer four-wheel drive as an optional extra.

“Rising fuel costs, the spiralling CO2 debate and the associated social pressures are putting a strain on the SUV segment,” says Nasir Shah, Sales and Marketing Director at JATO Dynamics. “Whilst many buyers still have a desire to own these cars, there is a genuine need to make them cheaper to own and run. If not, it will become a segment in serious decline.”

The relationship with off-road vehicles differs in countries across Europe. In the UK particularly, there has been a noticeable back-lash against large cars in general and particularly 4x4s. Increased taxation is making them less attractive to both retail customers and fleet operators and the outlook for segment is beginning to look difficult.

Even in Germany where SUVs are still in huge demand thanks to the strong domestic manufacturer products, public opinion is starting to question the impact on key environmental factors

Judith Studer, Research Manager for JATO Switzerland, says: “Even in a mountainous country like Switzerland where there’s a really good justification for using an off-road vehicle, the large, thirsty models are starting to find themselves in the firing line. There are critical voices here relating to SUVs and they are starting to get louder.”

Nasir Shah is sure that the segment will need to continue to evolve. He says: ”Clearly, manufacturers respond to market forces and currently the market is being influenced by both a change in customer requirements as well as European legislation. As long as SUVs are seen to be the environmental bad boys, they will continue to attract the attention of legislators. The recent changes to UK taxation are testament to this and we are confident that other countries will follow suit.”

27 March 2007 Staff
 
 

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