J.D. Power and Associates Reports: Growth in SUV Market Expected to Continue but at a Slower Pace;
15 September 1997
J.D. Power and Associates Reports: Growth in SUV Market Expected to Continue but at a Slower Pace;
Surging Supply will Change Competitive Dynamics in SUV Market
AGOURA HILLS, Calif., Sept. 15 -- With up to two dozen new
models being introduced over the next five years, the supply of sport utility
vehicles (SUV) will finally be catching up with, and even exceeding, demand.
The implications to automakers -- who have been enjoying incredible
profitability from this segment -- are profound according to the recent study
released by J.D. Power and Associates entitled, "The SUV Market of the 1990s:
Reassessing the Dynamics of Growth(SM)."
"The future for SUVs promises reduced consumer prices, lower profit
margins for dealers and manufacturers, greater vehicle selection, and
intensified competition from segments both outside and inside the SUV market,"
commented Paul Ballew, senior director of automotive analysis and chief
economist at J.D. Power and Associates.
The key developments within the SUV market are the emergence of new full-
size and mini SUV models, with an increasing emphasis on luxury features.
With growth of the SUV market projected to slow, this flood of new models will
increase competition among SUV models and manufacturers. In the forefront are
models ranging from the new Dodge Durango and the Ford Expedition. These
models are creating a whole new segment of intermediate sized SUVs that will
challenge both traditional full-size and compact SUV models. In addition, new
mini SUV models, such as the Toyota RAV4 and Honda CR-V, are also directly
targeting traditional compact SUV buyers.
"This greater fragmentation of the SUV market raises serious questions.
How will manufacturers maintain the distinctive characteristics that have made
SUVs popular, while at the same time, differentiate one model from the next?
At risk is the danger that new models will not pull in new buyers, but will
only heighten the competition of models within the SUV market," concluded Mr.
Ballew.
These and other findings are included in the 1997 J.D. Power and
Associates, "The SUV Market of the 1990s: Reassessing the Dynamics of
Growth(SM)." The report looks at growth potential into the next decade as
well as an assessment of the impact market changes will have for each
manufacturer. Generational differences (e.g., Baby Boomers vs. Gen Xers) and
their buying patterns are explored along with insights into the future effects
of a maturing SUV market. This report is designed to provide an objective
assessment of recent developments in the SUV market, and combines information
from J.D. Power and Associates numerous automotive studies, its industry
expertise, and its forecasting capabilities.
This study was compiled by the recently formed AutoMAPS (Automotive Market
Analysis and Planning Services) Group of J.D. Power and Associates and is a
companion piece to another recently released study entitled, "The Competitive
Battleground of the Future: Effects of an Emerging Near Luxury Segment." For
more information on either study, contact Bob Schnorbus, Director of
Automotive Analysis or Steve Shaw, Manager of Automotive and Industry Analysis
in our Troy, Michigan office at (248) 267-6800.
J.D. Power and Associates is an international firm best known for its
marketing information services in key business sectors including market
research, forecasting, and customer satisfaction. The firm's quality and
satisfaction measurements are based on actual customer responses from more
than a million consumers annually. With its headquarters in Agoura Hills,
California, the firm also has U.S. offices in Torrance, California; Michigan;
and Connecticut. Its international locations include Japan, Korea, England,
Canada and Brazil.
J.D. Power and Associates can be accessed through the World Wide Web at
http://www.jdpower.com. Email: info@jdpower.com.
No advertising or other promotional use can be made of the information in
this release or J.D. Power and Associates survey results without the express
prior written consent of J.D. Power and Associates.
SOURCE J.D. Power and Associates
