Strategic Analysis of the North American Small and Compact SUV Market

Strategic Analysis of the North American Small and Compact

Sports Utility Vehicle Market Top 20 Global OEMs Target Launch of Over 62 Models by 2020

NC7A-18

December 2013

2 NC7A-18

Research Team

Shwetha Surender Senior Research Analyst—BSIG

Automotive & Transportation

Bhavna Bhaisare Industry Analyst—BSIG


Lead Analyst Contributing Analyst

Project Manager

Vishwas Shankar Senior Consultant and Program Manager—BSIG


For more information:

Jeannette Garcia Corporate Communications – North America


+1.210.477.8427

[email protected]

mailto:[email protected]

3 NC7A-18

Section Slide Numbers

1. Executive Summary 4

2. Research Scope, Objectives, Background, and Methodology 16

3. Definitions and Segmentation 23

4. Market Overview 26

- Small and Compact SUV Roadmap of OEMs

- Product Mix of the Market

- Brands Market Overview

5. Mega Trends and Industry Convergence Implications 40

6. External Challenges: Drivers and Restraints—Small and Compact SUV Market 42

7. Unit Shipment Scenario and Revenue Potential Forecast 48

- Small and Compact SUV Market—Unit Shipment Scenario Analysis

- North America Market—Revenue Potential Forecast

- North America Market for Small and Compact SUV Segment

8. Comparative Analysis 53

- Segmentation Based on Range (Derived from MSRP)

Contents

4 NC7A-18


- MSRP Bandwidth of Small and Compact SUVs in North America

- Comparative Analysis—Vehicle Length vs. GVWR

- Comparative Analysis—Vehicle Length Vs. Average MSRP

- Comparative Analysis—Horsepower vs. Torque

- Comparative Analysis: Engine Capacity vs. Horsepower

- Comparative Analysis—Engine Capacity vs. Torque

- Comparative Analysis—Weight vs. Horsepower

Vehicle Feature Analysis 65

- Key Features Comparative Analysis—Interiors

- Key Features Comparative Analysis—Exteriors and Power Train

- Key Features Comparative Analysis—Safety

- Key Features Comparative Analysis—Transmission Specification

- Key Features Comparative Analysis—Power Train Specifications

- Key Features Comparative Analysis—Power Train Specifications 2020

Contents

5 NC7A-18


Consumer Profiling 72

Case Studies 74

Conclusions and Future Outlook 79

- Key Findings and Future Outlook

- Key Conclusions and Recommendations

- The Last Word—3 Big Predictions

Appendix 84

Contents

6 NC7A-18

Small and Compact SUV Market: Key Takeaways, North America, 2012

2

3

4

5

6

1

Mass-market OEMs, with revenue of $48.46 billion in 2012 over luxury OEMs ($9.40

billion), are expected to be among the biggest revenue generators. This trend is expected

to continue to 2020.

In the small and compact SUV segment, the sales volume (unit shipment) ratio of non-

premium to premium market changed from 89:11 in 2012 to 84:16 in 2020, an expected

5% shift toward the premium market.

The compact multipurpose vehicle (MPV) segment is expected to launch 5 more models

by 2020, creating direct competition to the small and compact SUV segment.

The Ford Escape is the current leader in sales volume, followed by the Honda CR-V.

They are expected to remain the top 2 models through 2020. The Chevrolet Equinox,

Toyota RAV4, and Nissan Rogue are expected to be among the top 5 through 2020.

Approximately 90% of the models are designed to fall within the weight band of 4,000 to

5,800 pounds (lbs) gross vehicle weight rating (GVWR) and maintain an average length

of 173 to 185 inches (in).

The global top 20 original equipment manufacturers (OEMs) target nearly 38 models in

North America before the end of 2013 and a total of 62 models by 2020. Overall, the

market in North America is expected to pass 3.2 million units in sales volume by 2020.

Key Findings Nearly 32 small and compact sports utility vehicles (SUVs) were available in the North American market at the

end of 2012. This segment is also the 3rd highest-selling segment in North America, with a 13% share in 2013.

Source: Frost & Sullivan

7 NC7A-18

Small and Compact SUV Market: Overview Non-premium Models, North America, 2012–2020

OEM Group Brand 2012 2013 2014 2015 2016 2017–

2020 TOTAL

Ford Ford Escape Ecosport 2

Toyota Toyota FJ Cruiser, RAV-4 2

GM Chevrolet Equinox, Captiva Sport 2

GMC Terrain 1

Mazda Mazda CX-5 CX-3 2

Renault-Nissan Nissan Juke, Rogue, Xterra 3

Hyundai Hyundai Tucson/ix35 Santa Fe

Sport 2

Fiat Chrysler Jeep Compass, Liberty, Patriot,

Wrangler Cherokee

Subcompact

Crossover

Panda

L 7

Fiat 500X, Patriot 2

Dodge Crossover 1

Mitsubishi Mitsubishi Outlander, Outlander

Sport ASX 3

Fuji Heavy Subaru Forrester, XV-Crosstrek 2

Honda Honda CRV HR-Z 2

VW VW Tiguan 1

BYD BYD E6 1

BMW Mini Countryman 1

TOTAL 21 4 4 3 1 1 34

Note: The study does not consists of brand Suzuki or vehicles strongly phasing out such as Ntiro, Mariner,

Torrent, Element, CX-7, Grand Vitara, and Tribute by 2012.

New Non-premium Model Introductions Nearly 13 models are expected to be added between 2013 and 2020. The Fiat-Chrysler group, with 11 models,

is expected to have the maximum number of models by 2020.


8 NC7A-18

Small and Compact SUV Market: Overview Premium Models, North America, 2012–2020

Group Brands 2012 2013 2014 2015 2016 2017-

2020 Total

Toyota Lexus LF- NX 1

Ford Lincoln MKC 1

Renault

Nissan Infinity EX37 Q30 2

Hyundai Kia Sportage Niro 2

GM Cadillac SRX Compact

CUV 2

Buick Encore Compact CUV 2

Fiat Chrysler Alfa Romeo GTX Compact

CUV 2

Geely Volvo XC60 1

BMW BMW X1, X3 X4 X2 4

Tesla Tesla Model X 1

Daimler Mercedes GLK-Class GLA-Class 2

VW Porsche Macan 1

Audi Q5 Q3 2

Hyundai Acura RDX 1

JLR Land Rover

Range Rover LR2, Evoque Defender 3

Jaguar CX17 1

TOTAL 11 3 5 2 5 2 28

New Premium Model Introduction BMW is expected to be the market leader in new premium models introduction, with 4 models, followed by

Land Rover, with 3 models. A total of 17 new premium models are expected to be launched by 2020.


9 NC7A-18

27

7.4

21

0.3

20

1.3

17

7.6

16

0.2

11

3.6

95

.7

86

.5

82

.9

63

.4

56

.6

56

.5

55

.8

52

.9

48

.3

44

.0

41

.6

37

.5

35

.0

31

.6

29

.1

27

.4

26

.6

25

.7

24

.7

23

.9

21

.4

20

.0

19

.2

17

.8

17

.5

15

.2

12

.1

12

.0

11

.8

11

.7

10

.9

10

.8

10

.5

10

.3

9.1

8.8

7.3

5.2

5.2

4.2

2.8

0.0

50.0

100.0

150.0

200.0

250.0

300.0

Ford

Escape

Chevro

let E

quin

ox

Honda

CR

-V

Toyota

RA

V4

Nis

san R

ogue

Jeep W

rangle

r

Jeep C

hero

kee

Jeep C

om

pact

CU

V

Su

ba

ru F

ore

ste

r

GM

C T

err

ain

Kia

Sport

age

Hyunda

i T

ucson/iX

35

Fia

t 500X

Cadill

ac S

RX

Nis

san J

uke

Mazda K

azam

ai/C

X-5

Subaru

XV

Cro

ssover

Honda

HR

-Z

Lin

coln

Com

pact

CU

V

Buic

k E

ncore

Audi Q

5

Volk

sw

agen

Tig

uan

Merc

edes-B

enz G

LK

cla

ss

BM

W X

3

BM

W X

1

MIN

I C

oun

trym

an

Buic

k C

om

pact C

UV

Lexus N

X-S

erie

s

Mitsubis

hi O

utlande

r S

port

Volv

o X

C60

Acura

RD

X

Pors

che M

acan

Audi Q

3

Alfa R

om

eo G

TX

Toyota

FJ C

ruis

er

Tesla

Model X

Alfa R

om

eo C

om

pact C

UV

BM

W X

2

Mitsubis

hi O

utlande

r

BM

W X

4

La

nd

Ro

ve

r R

an

ge

Ro

ve

r E

vo

qu

e

Me

rce

de

s-B

en

z G

LA

Infiniti E

X-S

erie

s/Q

X50

Land

Rover

Fre

ela

nde

r

Jagua

r X

-Cro

ssover

BY

D E

6

Land

Rover

Defe

nde

r

Un

its

(‘0

00

)

Small and Compact SUV Models in North America

Top-selling Small and Compact SUV Models (2020) The top 20 models will account for nearly 80% of unit sales in North America by 2020.

Small and Compact SUV Market: Top Models List, North America, 2020

Note: All figures are rounded. The base year is 2012.Source: LMC; Frost & Sullivan

10 NC7A-18

Canada (4)

Toyota RAV4, Hyundai

Tucson, GMC Terrain,

Chevrolet Eqinox

United States (10)

Nissan Xterra, Hyundai

Tucson, Acura RDX,

Chevrolet Equinox, Ford

Escape, Jeep Wrangler/

Patriot/ Liberty/ Compass,

BMW X3

Mexico (6)

Honda CR-V, Chevrolet

Captiva Sport, Cadillac

SRX, BMW X1

Germany (3)

VW Tiguan, Audi Q5,

Mercedes Benz GLK

Class United Kingdom (4)

Land Rover Range Rover

Evoque/ LR2, Nissan

Juke, Hyundai Tucson

Slovakia (1)

Kia Sportage

Belgium (1)

Volvo XC60

Venezuela (1)

Jeep Liberty

Japan (9)

Nissan Rogue/

Juke, Toyota FJ

Cruiser, Infinity EX

series, Mitsubishi

Outlander/Sport,

Mazda CX-5,

Subaru XV

Crosstrek /

Forester

Russia (4)

VW Tiguan, Mazda CX-5,

Chevrolet Captiva Sport,

BMW X1

China (2)

Audi Q5, Mazda CX-5

Vietnam (1)

VW Tiguan

Indonesia (1)

Kia Sportage

India (1)

Mini countryman

Small and Compact SUV Market: North America Target Models Production Hot Spots, Global, 2012–2020

Production Hot Spots The United States, Japan, and Mexico will be key production hotspots by 2020 for US-bound models.


11 NC7A-18

MINI

Mitsubishi

Kia

Volkswagen

Mazda

Hyundai

Subaru

GMC

Nissan

Toyota

Ford

Chevrolet

Honda

Jeep

Bra

nd

s

Non- Premium Brand

0 5000

Infiniti

Land Rover

Volvo

Acura

Mercedes-Benz

Audi

BMW

Cadillac

Million

Premium Brands

• The highest market shares were captured by the

Honda CR-V (13.2%) and Ford Escape (12.0%).

• The premium brand Cadillac share was 4.7%,

making it the top seller in the segment.

Jeep, 13.5%

Honda, 13.2%

Chevrolet, 12.2%

Ford, 12.0% Toyota,

8.0%

Nissan, 7.7%

GMC, 5.2%

Cadillac, 4.7%

Others*, 23.4%

Non-

premium

Brand ~

Revenue

$48.46 B

Small and Compact SUV Market: Percent Revenue Breakdown, North America, 2012

Premium

Brand ~

Revenue

$9.40 B

8,000

Note: The market share contains both premium and

non-premium brands.

Market Share Analysis (Based on Revenue in $) In 2012, Jeep was the biggest revenue-generating brand, with nearly 13.5% of market share in the small and

compact SUV segment, followed by Honda (13.2%) and Chevrolet (12.2%).

*A list of “Other” companies can be found in the appendix. Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan

12 NC7A-18

411 319 261

48

266

538

372

888

293

788

GM Fiat Chrysler Ford Tesla

Un

its

(‘0

00

)

OEMs

Largesize Trucks Midsize Trucks

Compact MPV Compact SUV

403 279 312

12

24 72

141

371

467

355

1,106

335

880


Un

its

(‘0

00

)

OEMs



2012 2020

Small and Compact SUV Market: North American OEMs Product Mix and Share of Compact SUVs in the

Truck Market, North America, 2012 and 2020

Product Mix of North American OEMs In the light passenger truck segment, Fiat-Chrysler has the highest mix of small and compact SUV percentage

(28%). GM had the highest unit sales (more than 400,000 units) in 2012, with this trend continuing in 2020.

Note: All figures are rounded. The base year is 2012. Source: LMC; Frost & Sullivan

13 NC7A-18

282

199

185 85

84

8

63

116

327

200

575

216

120

65 123

Honda Renault Nissan

Toyota Hyundai Fuji Heavy

Un

its

(‘0

00

)

OEMs



239

216

209 113

124

49 23

63

122

377

232

701

347

110

78

183

Honda Renault Nissan

Toyota Hyundai Fuji Heavy

Un

its

(‘0

00

)

OEMs

Largesize Trucks Midsize Trucks Compact MPV Compact SUV

2012 2020

Small and Compact SUV Market: APAC OEMs Product Mix and Share of Compact SUVs in the Truck

Market, North America, 2012 and 2020


Product Mix for APAC OEMs The Honda group is expected to remain the leader in terms of sales volumes in 2012 and 2020, with 36% of

light truck volume in small and compact SUVs by 2020.

14 NC7A-18

55

26

19

12

15

-

24

0.5

10

8

24

Mazda Mitsubishi Geely Tata BYD

Un

its

(‘0

00

)

OEMs



44

30

18

22

4

17

36 12

6

27

Mazda Mitsubishi Geely Tata BYD

Un

its

(‘0

00

)

OEMs


2012 2020

Small and Compact SUV Market: APAC OEMs Product Mix and Share of Compact SUVs in the Light

Truck Market, North America, 2012 and 2020


Product Mix for APAC OEMs (continued) The Mitsubishi group had the highest product mix of 97% (small and compact SUVs) in 2012 and will be 100%

in 2020. BYD will enter the market after 2012.

15 NC7A-18

411 319 261

-

48

-

266

538

372

-

888

293

788

-


Un

its

(‘0

00

)

OEMs



403 279 312

12

24 72

141

-

371

467

355

1,106

336

880


Un

its

(‘0

00

)

OEMs



2012 2020

Small and Compact SUV Market: North American Light Truck Product Mix OEMs and Share of Compact

SUVs, North America, 2012 and 2020

Note: All figures are rounded. The base year is 2012.Source: LMC; Frost & Sullivan

Light Truck Product Mix of North American OEMs Fiat-Chrysler has the highest mix of small and compact SUV percentage (28%). General Motors (GM) had

the highest unit sales (more than 400,000 units) in 2012, with this trend continuing in 2020.

16 NC7A-18

1,090

275

997

2020

Un

its

(‘0

00

)

Year

North American OEMs

European OEMs

APAC OEMs

403

312

278

238 215

209

124

113

95 83 44 0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Un

its

(‘0

00

)

OEMs


~ 3.2 M*

* OEMs predict market growth of 2.4 million; however, Frost & Sullivan predicts growth will be 3.2 million in 2020.

Note: APAC = Asia-Pacific. Graph in center represents unit shipment data for 2020. All figures are rounded. The base year is 2012.Source: LMC; Frost & Sullivan

2012

Un

its

(‘0

00

)

Year

North American OEMs

European OEMs

APAC OEMs

934

186

916

2012 vs. 2020 Small and Compact SUV Growth The small and compact SUV segment is expected to grow from 2.0 million units in 2012 to 3.2 million units by 2020

(unit sales per annum).

Small and Compact SUV Market: Unit Shipment Forecast by OEM (HQ), North America, 2012 and 2020

2.0 M

17 NC7A-18

Parameters 2012 2020

Market Status

The market size for small and compact SUVs

in North America is 2.0 million units per

annum.

The market for small and compact SUVs in

North America is expected to grow to 3.2

million units per annum.

Competition

The top 7 OEM groups are expected to

account for more than 80% of market share in

North America.

GM, followed by Honda and Fiat-Chrysler

group, make up the top 3 participants in the

market.

The top 7 OEM groups are expected to

continue to account for nearly 80% of

market share in North America.

GM, followed by Fiat-Chrysler and Honda

group, remains among the top 3

participants in the market.

Vehicle Models

Nearly 18 global OEMs had 32 small and

compact SUV models in the North America

market.

Twenty global OEMs offer more than 62

models in the North American small and

compact SUV market.

Vehicle Price Vehicle prices are in the range of $15,995 to

$58,220.

Vehicle prices are expected to be in the

same range as in 2012.

Technology Infotainment is abundant. Active safety systems and performance

enhancing will be abundant.

Barriers to enter

North American

Market

Vehicle safety is a concern as performance

according to the Insurance Institute for

Highway Safety (IIHS) testing shows areas of

improvement.

Vehicle performance is reduced to increase

fuel economy.

Key Findings and Future Outlook Twenty key global OEMs will target more than 62 models in the North American small and compact SUV market

by 2020.


18 NC7A-18

Market Engineering Methodology


One of Frost & Sullivan’s core deliverables

is its Market Engineering studies. They

are based on our proprietary Market

Engineering Methodology. This approach,

developed across the 50 years of

experience assessing global markets,

applies engineering rigor to the often

nebulous art of market forecasting and

interpretation.

A detailed description of the methodology

can be found here.

http://www.frost.com/prod/servlet/me-research.pag