(Bloomberg) -- In America (and the rest of the world, for that matter), the SUV is king of the auto industry. And Jeep is still the king of SUVs—but Toyota is a looming threat.
Fiat Chrysler Automobiles NV's mud-loving stepchild moved 689,000 utility vehicles in the U.S. through October, more than any other brand. That number represents, however, a 12 percent decrease from last year, making it likely Jeep will lose its crown by the end of the year.
Toyota Motor Corp. is poised to usurp the throne, thanks to a pair of SUVs—the new C-HR and the ubiquitous Rav4, which recently ousted Honda Motor Co.'s CR-V as the bestselling SUV in the U.S.
Elsewhere on the spectrum of SUV supremacy, the relatively small car-makers Subaru Corp. and General Motors Co.'s Buick are punching above their weight. Toyota's Lexus has a large lead among luxury brands, while GM's Cadillac brings up the rear.
At the moment, this is a breezy business. One could make an SUV out of popsicle sticks and toilet-paper tubes and still move a few thousand units (see: Aztec, Pontiac, and Nitro, Dodge). But it helps to sell something fresh. Jeep's swoon, for example, is partially explained by what executives call “product cadence,” which is Detroit-speak for stale vehicles. The brand's rather tired Patriot was scrapped this year, and the Compass got its first major overhaul in a decade this fall.
An abundance of choice helps as well. The correlation between sales and the number of SUVs on offer by any given brand is fairly strong (0.64 this year to be exact). That's part of the reason why Lexus (with four utility pods) is so soundly spanking Cadillac (which has only two).
All this is important, at the moment, because the SUV likely constitutes the swan song of the auto industry as we've known it. It's all robot-drivers and flying cars from here, automation and efficiencies that threaten the very idea of individual car ownership. In the meantime, however, profits are fat, and the companies best geared to seize this fleeting day are the ones with their SUV game on point.
Last month, nearly one of every two vehicles bought in the U.S. was an SUV. For a number of brands, the mix was far richer.
These are the companies whose executives most accurately appraised the road ahead. In racing terms, they had their eyes trained a little bit farther around the curve. “It's a huge shift in the industry,” said Edmunds.com analyst Jeremy Acevedo. “As these manufacturers that were a little late roll out new models, the space is going to become much more competitive."
To contact the editor responsible for this story: Josh Petri at jpetri4@bloomberg.net.
©2017 Bloomberg L.P.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
