August 12, 2014 at 1:42 pm

Sleeker GM, Honda SUVs have buyers shunning sedans

When Dennis Bashaw last considered buying a sport-utility vehicle a decade ago, he saw them as gas-guzzling road hogs. So he was stunned last month to find an array of compact, smooth-riding SUVs that get good mileage.

He opted for a Honda CR-V for $26,800 that’s rated for 30 miles per gallon on the highway.

“It was such a night-and-day experience from 10 years ago,” said Bashaw, a 53-year-old pharmacist in Potomac, Md. “Back then, they were more basic and sparse. Now you’ve got all these entertainment options, and they’re safer than ever. It’s incredible.”

Once written off as an overindulgent relic of the pre-recession world, the SUV has gone from pariah of the parkway to people’s car of choice. Led by models like Bashaw’s silver CR-V, SUVs have overtaken the sedan as the most popular vehicle type in the U.S. After decades of dominance, sedans accounted 35.4 percent of new auto sales through May, while SUVs made up 36.5 percent, according to automotive researcher IHS.

“The SUV was once seen as a premium vehicle by most consumers, but they’re a lot cheaper now than they used to be,” said Jessica Caldwell, an Edmunds.com auto analyst. “There’s still the high-end, luxury SUV, but there’s an extremely diverse range of prices since they come in all sizes and styles now.”

Traditional, full-size, truck-style, body-on-frame SUVs like the GMC Yukon and the Chevrolet Tahoe continue to sell — now with better, though not stellar, mileage. Even so, much of the growth in this vehicle category can be attributed to the rise of compact, small SUVs.

The comeback was evident in automakers’ July sales figures. Jeep brand SUV deliveries jumped 41 percent. The Tahoe, which was redesigned in the past year along with the rest of General Motors Co.’s large SUVs, climbed 52 percent on the month. The Ford Explorer, once synonymous with the top-heavy gas guzzlers of old, rose 32 percent.

It’s not just American automakers riding SUVs to high sales. Toyota Motor Corp., the world’s largest automaker, reported record profit in the second quarter, reflecting the strength of SUVs. Meanwhile, BMW AG, the world’s biggest manufacturer of luxury vehicles, reported the highest profit in three years as sales of its X5 SUV rose 30 percent.

A recovering U.S. economy, affordable monthly payment options and newly redesigned and competitive crossover utilities have led American consumers to rediscover their affinity for the SUV, a vehicle type that provides more storage than a sedan, a higher seating position than a station wagon and better styling than a minivan.

To be sure, it wasn’t so long ago that the SUV was almost left for dead. High gas prices in 2006 clobbered demand for once-ubiquitous utilities: Ford Explorer sales plunged 25 percent while Chevy TrailBlazer deliveries dropped 28 percent. Since then, small SUVs’ share of new-auto sales has increased from 8.1 percent to 13.1 percent.

Detroit, which had become dependent on large SUVs and pickups during the previous decade, were hurt as its competitors introduced smaller, more fuel-efficient crossover SUVs like the CR-V, Toyota’s Highlander and Hyundai Motor Co. Santa Fe, as well as higher-end models like the popular Lexus RX. Even Porsche, the iconic sports-car brand, got into the game with its Cayenne, and now a smaller Macan.

SUVs are gaining popularity in Asian and European markets where they were once shunned, said Caldwell, the analyst at Edmunds.

“It wasn’t long ago that these SUVs, globally, were seen as these American, over-indulgent, excessive cars — way too big for their own good,” she said. “It’s come to be a lot more popular worldwide. They’ve evolved thanks in part to global competition.”

The American companies were forced to react and either introduce new vehicles or overhaul existing ones in order to compete, said IHS Automotive analyst Tom Libby.