2016 Auto Sales: SUVs and Trucks Continue to Surge, Passenger Cars Hitting the Brakes
There could be a tight squeeze coming to service shop operators in the years to come. This won’t necessarily be on cash flow but rather the literal space in shops as more customers might be driving in with an SUV. American drivers have continued to go big when they drive home, as SUV and light truck sales topped passenger cars for 2016 model vehicles.
“The 2016 model year saw the same trends we’ve seen in recent years, only amplified,” said Michelle Krebs, Autotrader senior analyst. “Sales of traditional cars, particularly compact and midsize cars, continued to fall. Sales of sport utility vehicles rose.”
That mirrored the Cars.com Top 10 Best-Sellers list for September, which showed a 5.5 percent year-to-date increase in sales of the Ford F-Series line of trucks, followed by an 8.3 percent uptick for the Ram pickup. The Chevrolet Silverado rounded out the top three, despite a slight drop in sales year-to-date of 3.5 percent. Most notable, however, was that the Toyota Corolla was the only passenger car in the top five vehicles, as the Honda CR-V filled the fifth spot.
Trucks may have surged at the end of the summer, but SUVs were king of the road last year, according to Autotrader numbers, and won’t likely be dethroned this year.
“In 2015, the category of compact sport utilities was the No. 1 segment for sales,” Krebs said. “The same will be true in 2016.”
Over the summer, the Honda CR-V earned its own distinction.
“The Honda CR-V crossover passed the Toyota Camry as the top seller in August,” noted Matt DeLorenzo, managing editor of news for Kelly Blue Book’s KBB.com. “In particular, the crossover SUVs, which are car-based, are growing in popularity. This signals a shift from the typical family vehicle, which was the four-door sedan, and now we’re seeing more SUV/crossovers replacing them.”
What also remains true is that vehicles are getting bigger, which could mirror the increased size of American TVs, homes and, unfortunately, waistlines. Bigger is apparently as American as baseball and apple pie.
“We’re seeing that the pickup will be the top selling vehicle,” DeLorenzo added. “[What should be] noted is that vehicles are growing — the Nissan Titan XD is larger than the traditional half-ton pickup. We’re also seeing things like the CR-V and Toyota’s RAV4 are both growing in size. These used to be the entry-level compact/sub-compact size vehicles. Now, these are really in the compact to midsize. That could open up an area below the Honda CR-V, but everything else is bigger.”
Even luxury car buyers are looking at bigger vehicles. In 2016, the sports car was out, and the luxury SUV was in.
“What is happening in the non-luxury market is also occurring in the luxury market,” Krebs said. “Traditional luxury cars are down, while luxury SUV sales are up. Luxury makers heavier in cars than in SUVs are struggling. BMW has been down for several months now, while those who are strong in SUVs, like Lexus, are doing well.”
The move to larger SUVs and trucks doesn’t mean consumers are completely ditching passenger vehicles, but those who do choose a traditional sedan are not looking toward Detroit. Japanese automakers had the best selling cars for September, according to Cars.com. Detroit’s Big Three were boxed out of the top five Best Selling Cars by the Toyota Camry, Honda Civic, Honda Accord, Toyota Corolla and Nissan Altima, which bested the Ford Fusion that filled the sixth spot.
American automakers fared better in the Best Selling Truck positions in recent months, with the Ford F-Series, Chevrolet Silverado, Ram pickup and GMC Sierra filling spots one to four ahead of fifth-placed Toyota Tacoma. The SUV/crossover market was split, with the Honda CR-V, Nissan Rogue and Toyota RAV4 besting the Ford Escape and Chevrolet Equinox for the top five spots.
The Changing Vehicle
The shift toward SUVs and light trucks is just one part of how the service business may have to evolve with the times. This year has seen continued trends in the move to turbocharged vehicles – and in October, Honda revealed its new CR-V crossovers, which will be slightly wider and longer than the outgoing models, will also include an available turbocharged 1.5-liter direct-injected four-cylinder engine.
“This is part of a shift we’re seeing away from V6 and V8 engines to turbocharged four-cylinder and six-cylinder engines,” DeLorenzo said. “The oil change interval with turbocharged engines will become shorter, which will result in the need for more oil changes in those vehicles. It is a far more complicated system.”
Automakers have said these turbocharged engines don’t require special precautions or operating procedures, but do recommend that owners observe the general guidelines for minimization of wear and tear. On the service side it could require some new procedures along with new opportunities — but this is just one of several changes service operators should be aware of with new vehicles.
“It will be interesting to see what happening with eight-, nine- and even 10-speed transmissions,” DeLorenzo added.
One other significant change that will continue to present issues to drivers, and potential opportunities for shops, is with the more technical computerized systems. Just as the desktop computer requires regular updates, more sophisticated vehicles may need these, as well.
“Right now, that sort of complexity will result in call backs to the dealerships, but as the cars age, service shops will be able to step up as the computer controls need to be updated and reflashed,” DeLorenzo said.
With drivers opting to go big, it could present another opportunity for shops that can do light body work — especially as the choice of materials has changed in efforts to reduce weight.
“I’d be interested in what the F-150’s aluminum construction could mean when it comes time for servicing,” DeLorenzo said. “Some body shops and repair facilities will have to add aluminum repair to their services.”
While most of the cars sold in 2016 will likely see dealer service, consumers may be lured away from the dealership at an increasing rate. According to Cox Automotive’s 2016 Maintenance and Repair Study, which was released earlier this year, many drivers are opting to skip the dealership service department and choosing to go elsewhere when repairs are needed.
The study found after buying a car, 72 percent of customers sought third-party repair services. The main reasons cited were price and customer service, with 58 percent of respondents indicating they avoid the dealership for service work due to fears they would be overcharged. That could be good news for those who can offer competitively priced services, especially as these ever-more complex vehicles begin to need service.
The trick may be making room in the bays — and in the waiting rooms.