The 2017 Honda Pilot, an Edmunds pick for a crossover. The Pilot has 78.5 percent domestic content and is built in Lincoln, Alabama. (American Honda Motor Co.)

The 2017 Honda Pilot, an Edmunds pick for a crossover. The Pilot has 78.5 percent domestic content and is built in Lincoln, Alabama. (American Honda Motor Co.)

Americans go Rogue as compact SUVs eclipse family sedans

Bloomberg

Toyota’s U.S. sales chief predicted in late 2015 that the RAV4 would outsell Camry within five years. It won’t take nearly that long.

Family sedans like Toyota’s Camry — the top-selling U.S. car the last 15 years — will be surpassed for the first time by a trio of compact sport utility vehicles: the Nissan Rogue, Toyota RAV4 and Honda CR-V. Until Hurricane Harvey hit, some analysts expected strong demand for these models to pace the industry’s first monthly sales gain this year in August.

The faster-than-anticipated rise of crossovers reflects a sweeping shift in American consumer taste and rushed efforts by manufacturers to rework their factories at the whims of car shoppers. As the companies reconsider projections for just how much appetite there is for compact SUVs, more pointed advertising campaigns are going to help determine which models come out on top.

“It’s so hard to forecast small SUVs,” Bob Carter, Toyota’s top U.S. sales executive, said this month. “We forecast for growth, then it blows through the forecast and goes further.”

After Harvey slammed Houston — one of the largest vehicle markets in the country — Kelley Blue Book and LMC Automotive each trimmed their August sales projections released before the hurricane made landfall. Analysts predict the annualized selling rate, adjusted for seasonal trends, may drop to 16.4 million, according to the average estimate in a Bloomberg News survey, from 17.2 million a year earlier.

Demand for vehicles to replace those damaged by flooding in the Gulf of Mexico region may boost auto demand starting as soon as September and continue into next year. Reconstruction projects for businesses, homes and infrastructure may spur sales of full-size pickups, like Ford Motor Co.’s F-Series, General Motors Co.’s Chevrolet Silverado and Fiat Chrysler Automobiles NV’s Ram models, the only models that still outsell crossovers.

Through July, the Rogue was the top-selling vehicle in the U.S. after those full-size pickups, with deliveries surging 25 percent. Toyota’s RAV4, up 15 percent, is only about 1,500 units behind.

This summer, Toyota ads in some regional markets were specifically aimed at winning over buyers who were considering a Rogue, and RAV4 outsold Rogue in July.

“They’ve been pretty aggressive,” said Judy Wheeler, Nissan’s vice president of U.S. sales. “They’re running interference with our Rogue success.”

Toyota has no national strategy for knocking off Nissan’s crossover, and the ads were likely aired by regional dealer groups, Carter said. He said some of the Nissan Rogue’s sales gain this year can be attributed to deliveries to fleet customers, such as rental-car companies.

To catch up, Toyota is working with suppliers to boost production of the hybrid version of RAV4, which is built in Japan. While sales of Toyota’s segment-leading Prius line have tumbled 19 percent this year through July, sales of the gasoline-electric RAV4 are up 6.4 percent and would be even higher if dealers could get more of them, Carter said.

“A lot of these went to hybrid buyers who were loyal to the brand but who were cooling off on conventional sedans,” Carter said. “We’re capacity constrained.”

Even if Toyota can get more hybrids, Nissan may still have the last laugh. The Rogue line is expanding with the rollout of the Rogue Sport, a slightly smaller and cheaper version just now reaching wide distribution.

Turf war aside, both automakers are benefiting from the shift in consumer taste. Analysts are projecting Toyota and Honda will report the biggest sales gains in August among the six largest automakers in the U.S.

The seismic rearrangement of the sales rankings that’s seen SUVs overtake sedans has been bubbling up for a while, said John Mendel, Honda Motor Co.’s former top U.S. sales executive.

“It’s like watching kids grow,” Mendel, who retired in April, said by phone. “You watch them every day and you don’t really notice so much. Then all the sudden you look back from two years ago, like, ‘Holy crap! When did that happen?’”

Talk to us

More in Herald Business Journal

The tower of Paine Field Airport stands in a fog bank forcing flights to be averted or cancelled in Everett, Washington on January 25, 2022. (Kevin Clark / The Herald)
More 5G-related cancellations as Paine Field fog persists

The FAA has not cleared certain planes to land in low visibility in Everett due to nearby 5G cellular towers.

Funko mascots Freddy Funko roll past on a conveyor belt in the Pop! Factory of the company's new flagship store on Aug. 18, 2017.  (Dan Bates / The Herald)
Despite Arizona move, Everett leaders expect Funko HQ to stay

The toymaker is closing Everett warehouses. But a recent “HQ2” expansion has the city confident Funko will remain rooted here.

2021 survey results from the State Broadband Survey for Snohomish County. (Washington State Department of Commerce)
$16M grant to speed up broadband to north Snohomish County

In Darrington and elsewhere, rural residents have struggled to work remotely during the pandemic. A new project aims to help.

An Alaska Airlines Embraer 175 airplane bound for Portland, Ore., takes off Monday, March 4, 2019, at Paine Field in Everett, Wash. The flight was the first flight on the inaugural day for commercial passenger flights from the airport. Alaska Airlines began scheduled flights Monday, and United Airlines will begin commercial flights on March 31, 2019. (AP Photo/Ted S. Warren)
5G-related airline cancellations arrive at Paine Field

One type of plane serving Everett is subject to restrictions due to feared cellular phone interference with navigation.

FILE - Washington Attorney General Bob Ferguson talks to reporters, Monday, Aug. 26, 2019, during a news conference in Seattle. In a 5-4 decision Thursday, Jan. 20, 2022, the Washington Supreme Court upheld an $18 million campaign finance penalty against the Consumer Brands Association, formerly known as the Grocery Manufacturers Association. Ferguson sued the group in 2013, alleging that it spent $11 million to oppose a ballot initiative without registering as a political committee or disclosing the source of the money. (AP Photo/Ted S. Warren)
Washington justices uphold $18M fine in GMO-labeling case

Big grocers funneled dark money into a campaign against genetically modified labels on food packaging.

In this photo taken May 17, 2017, wine barrels are shown at a vineyard adjacent to the Walla Walla Vintners winery in Walla Walla, Wash. The remote southeastern Washington town of Walla Walla - which used to be best known for sweet onions and as home of the state penitentiary - has now reinvented itself into a center of premium wines and wine tourism. (AP Photo/Nicholas K. Geranios)
More sustainable Washington wines are on the way

Labels will indicate grape growers met guidelines in 9 areas, including water, pest and labor practices.

Funko warehouse in Everett. (Kevin Clark / The Herald)
Funko to close Everett warehouses, shift work to Arizona

The company headquarters are currently in downtown Everett, but distribution will move to a Phoenix suburb.

FILE - In this Monday, March 1, 2021 file photo, The first Alaska Airlines passenger flight on a Boeing 737-9 Max airplane takes off on a flight to San Diego from Seattle-Tacoma International Airport in Seattle. A Boeing pilot involved in testing the 737 Max jetliner was indicted Thursday, Oct. 14,2021 by a federal grand jury on charges of deceiving safety regulators who were evaluating the plane, which was later involved in two deadly crashes. (AP Photo/Ted S. Warren, File)
Alaska Airlines to add Boeing 737s to the Paine Field fleet

It’s a sign of the growing popularity of flying from Everett. So far, much smaller Embraer E175s have been the rule.

A sign bearing the corporate logo hangs in the window of a Starbucks open only to take-away customers in this photograph taken Monday, April 26, 2021, in southeast Denver.  Starbucks is no longer requiring its U.S. workers to be vaccinated against COVID-19, reversing a policy it announced earlier this month. The Seattle coffee giant says, Wednesday, Jan. 19, 2022,  it's responding to last week’s ruling by the U.S. Supreme Court.  (AP Photo/David Zalubowski)
Starbucks nixes vaccine mandate after Supreme Court ruling

The move reverses a policy the coffee company announced earlier this month.

Logo for news use featuring the municipality of Stanwood in Snohomish County, Washington. 220118
Regulators OK doubling of composting operation in Stanwood

Lenz Enterprises can now handle 150,000 tons a year. Residents worry odors will be a problem.

Mara Wiltshire, left, celebrates her first place finish in Mario Cart against her son Miles Jenkins, 7, as Calvin Jenkins, 5, looking on Friday evening at their home in Everett, Washington on January 7, 2022.  (Kevin Clark / The Herald)
Child care’s heightened burden takes parents out of workforce

One Snohomish County mom said she couldn’t return to work “because I didn’t have child care and I wouldn’t be able to afford it.”

Christian Sayre
Everett bar owner arrested again on new sexual assault charges

Christian Sayre, longtime owner of The Anchor Pub, was charged Friday with 10 counts of felony sex offenses.