How the automobile industry turned us into SUV drivers

24 June 2024
How the automobile industry turned us into SUV drivers

Last August, Paul Marriott emailed CBC’s What on Earth? newsletter to share his frustration buying a vehicle. In looking to replace his 2006 Toyota Matrix, a compact hatchback, the Ontario resident had detected a pattern.

“It is impossible to buy a new small car,” he wrote. “Gone are the Honda Fit, the Toyota Yaris, GM Spark, Nissan Versa, Ford Fiesta, etc. Apparently, people only want SUVs.”

Marriott was largely right. Despite the higher price tag, SUV and truck sales have grown exponentially in North America in recent decades, eclipsing sedans in the process. According to DesRosiers Automotive Consultants, 86 per cent of all vehicles sold in Canada in May were classified as SUVs or pickup trucks. And Europe and Asia have developed a greater taste for them, too.

But the ubiquity of SUVs and trucks isn’t an accurate reflection of what people want to drive, say industry analysts.

The trend has been greatly influenced by a combination of savvy marketing, government regulations that incentivize bigger vehicles and limited supply of more modest ones.

Indeed, much of it is driven by one simple economic fact.

“Smaller cars are less profitable,” said Stephanie Brinley, associate director at U.S.-based transportation consultancy S&P Global Mobility.

In recent years, auto manufacturers have phased out many smaller vehicles, citing weak demand, in favour of an ever-growing array of SUVs and light trucks.

Not only do they cost more to purchase and fill up, but they are having an outsize effect on global warming. As the International Energy Agency points out, if SUVs were a country, they would be the fifth-biggest emitter of CO2.

Paul Marriott said he ended up finding a Kia Rio, but “we were informed that we were lucky, as they were expecting them to be discontinued soon.”

David Zipper, a Washington, D.C.-based senior fellow at the MIT Mobility Initiative who has studied the automotive industry for decades, calls it a “prisoner’s dilemma” — a situation where consumers who may prefer smaller cars are “being pushed toward larger ones.”

Outselling cars

Vehicles have not only become bigger, but around 2015, SUVs and trucks for the first time outsold sedans in the U.S. and Canada.

In 2018, Ford announced it would no longer make compact vehicles like the Fusion, Focus and Fiesta in North America anymore, leaning even more heavily into SUVs, crossovers and trucks.

The company cited waning demand for small cars, but also acknowledged it wasn’t making as much money selling them. Companies like GM and Volkswagen have taken a similar path.

New Volkswagen SUVs for sale are seen at an auto mall in Ottawa in 2021. Volkswagen, Ford and GM are among the manufacturers that have stopped making compact vehicles to focus on SUVs and trucks. (Justin Tang/The Canadian Press)

“You could make an argument: how much of it is consumer demand and how much of it is manufacturer push?” said David Adams, president and CEO of the Global Automakers of Canada.

One of the reasons we got here is government regulation. In response to the 1970s oil crisis, the U.S. government introduced a number of measures ostensibly intended to reduce gasoline usage. One of them was the Corporate Average Fuel Economy (CAFE) standard.

But instead of increasing the fuel economy of every model equally, it required automakers to increase the average fuel economy across their fleets. This created a two-tier system, where smaller cars balanced out the relatively poor fuel economy of larger ones.

The result was that SUVs remained a going concern despite high oil prices, and once oil prices dropped in the early ’80s, consumers showed a greater propensity for light trucks.

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Early in the 21st century, the U.S. government revised CAFE to tie a vehicle’s fuel standard to its physical “footprint,” a move that ultimately allowed larger vehicles to get away with lower emissions standards and contributed to what Zipper calls “car bloat.”

Because the North American auto market is so tightly integrated, Canadian consumers have been a part of this trend.

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For the auto industry, this was an opportunity to “not only make greater profits, but also to be subject to less stringent emissions standards,” said Anne-Catherine Pilon, a transportation and mobility analyst at Quebec-based environmental advocacy group Equiterre.

What do consumers want?

Zipper says auto manufacturers understood as far back as the 1970s that they could make more money building SUVs, which is why they started marketing them as preferable to sedans or even station wagons. The AMC Jeep, for example, was pitched as the ideal vehicle to take camping.

Soon, advertisements began to insinuate SUVs were the best way to navigate the urban jungle. Zipper cites a 1992 ad for the Chevy Suburban starring Australian golfer Greg Norman, in which he finds himself stuck in highway gridlock, only to roll his massive truck over construction debris on the way to an off-ramp.

“It plays to this reptilian brain that I think automakers did with SUVs and pickups, to basically say, ‘Wouldn’t you rather be … the biggest person on the road?'” Zipper said.

Some Ontario groups are calling for greater safety measures for pedestrians and cyclists against larger vehicles, saying they have the research to prove they are more dangerous.

Brinley at S&P Global Mobility says the rise of SUVs is a reflection of consumers’ desire to get greater utility out of their vehicles, which means the capacity to move more people and cargo.

But that comes at a price. For example, in Canada, the five-seat 2024 Nissan Versa sedan starts at $20,298, while a five-seat 2024 Nissan Rogue SUV starts at $33,648 (about 66 per cent more). Meanwhile, the 2024 Hyundai Elantra starts at $21,999, while the Tucson starts at $34,199 (55 per cent more).

A Rivian R1S is displayed outside of the auto manufacturer’s new space at Ponce City Market in Atlanta in 2023. Automakers are leaning heavily on electrified SUVs, trucks and large cars, which means high prices and profits. (Matthew Pearson-WABE via The Associated Press)

Seeing that SUVs and trucks are now inescapable on Canadian roads, Zoe Long wanted to understand why drivers like them so much, particularly since they cost more.

Long, a sustainable transportation researcher at Simon Fraser University, and Jonn Axsen, professor of sustainable transportation at SFU, undertook a study of 1,000 SUV drivers in the Vancouver area. The study revealed that drivers “see them as superior to cars,” said Long.

She said another major finding was that they see SUVs as safer, because they sit up higher and are able to see the road better, while also feeling more protected in a potential crash.

As more and bigger vehicles surround us on the road, it’s led to what many observers describe as an “arms race” where drivers feel they need a bigger and bigger vehicle to feel safe.

Long said this “perceived safety” is really at odds with “the reality that SUVs are much more likely to be involved in fatal traffic accidents than cars.”

Studies have shown that in collisions, SUVs are far more likely to seriously injure or kill occupants of other vehicles, due to their greater power and weight, as well as height, which can cause them to hit more vulnerable parts of the car, such as windows.

They’re also far more likely to kill pedestrians, especially if they have front ends that are tall, blunt — or, worse, both.

This has been taken into account in vehicle safety ratings in Europe. So far, it’s not the case in North America, and Equiterre’s Pilon said that means people aren’t getting what they need to make informed decisions about SUV safety.

But the U.S. National Highway Traffic Safety Administration has proposed adding data to safety ratings about the ability of vehicles to minimize pedestrian injuries, following a 37 per cent increase in pedestrian deaths since 2000.

‘Changing the social norm’

Adams said when choosing a vehicle, most SUV buyers don’t make their decision based on something that’s going to satisfy “95 to 99 per cent” of their driving needs, which is commuting and running errands.

“They purchase their vehicle for the one weekend of the year when ‘I tow my boat up to the lake and I want to make sure I can do that,'” he said, noting “it is ironic when they make that purchase and then complain about high gas prices.”

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Equiterre’s Pilon said all of this is part of a larger plan by automakers of “changing the social norm” and convincing people they need larger vehicles — when, for example, families are actually having fewer children than they did in 1990.

Some environmental groups and governments have been trying to counteract that view. Equiterre launched a “No SUV for me” campaign asking consumers to assess their true needs. It also surveyed consumers about policies already in place in some jurisdictions, such as higher parking fees for SUVs and trucks in Montreal’s Plateau-Mont Royal bureau, higher registration fees for heavier vehicles in Washington, D.C., and a ban on SUV advertising in Edinburgh, Scotland. The survey found most respondents were in favour of regulating ads for SUVs and trucks.

A poster reading ‘More or less SUVs in Paris? Vote on February 4’ is seen on a billboard in a Paris street two days before a public vote earlier this year where Parisians voted to sharply increase parking fees for SUVs. (Benoit Tessier/Reuters)

On the other hand, while they have become a major driver of carbon emissions growth, Adams said the abiding popularity of SUVs is giving auto manufacturers greater incentive to produce electric vehicles.

That is, SUV EVs.

“As we make this transition to electrification, the reality is that those vehicles afford more of a profit margin for the manufacturer than smaller passenger vehicles,” said Adams.

“You could make the argument that to a certain extent, today’s consumers are assisting in funding that transition for automakers to produce the vehicles of tomorrow.”

Source: cbc


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