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Nissan had plenty of big news as it rolled into Chicago for the Windy City’s annual auto show media preview — big as in the full-size Armada SUV and Titan pickup, both getting complete makeovers for the 2017 model-year.
But Nissan was hardly alone. Everywhere you look at the sprawling McCormick Place convention center, trucks are in the spotlight, whether full-size pickups like the Ram Power Wagon or the compact Hyundai Santa Fe Sport crossover-utility vehicle. Hyundai’s sibling Korean brand Kia even weighed in with the new Niro, a hybrid CUV.
“Recognizing there’s a major consumer shift taking place, we want to take advantage of that,” explained Phil O’Connor, the head of the Nissan brand in the U.S. market, during a preview of the new Armada SUV.
The U.S. auto industry has scored a major turnaround since the depths of the recession, when new vehicle sales slumped to less than 10 million a year. Volume topped a record 17.5 million for 2015, but perhaps the more significant figure focuses on the surge in sales of “light trucks,” a somewhat ambiguous term that covers conventional body-on-frame pickups and SUVs, as well as more modern, car-like crossovers and minivans.
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Collectively, trucks accounted for 58 percent of the U.S. market in 2015, about 10 percentage points higher than during the industry’s darkest days. And the surge is far from over, some predict. The percentage jumped to 60 percent in December, and Ford’s president of the Americas Joe Hinrichs expects utility vehicles alone could gain another 10 points of share this decade.
During the Chicago Auto Show media preview, Ford marketing and sales chief Mark LaNeve announced the Detroit maker will add four more utility vehicles to its current fleet, which ranges from the compact Escape crossover to the massive Lincoln Navigator, a classic, body-on-frame “truck-truck,” in industry lingo.
And Ford is by no means unique. Hyundai will add at least three, and possibly four, more utility vehicles in the next few years. Toyota is likely to introduce several more, as well, executive vice president Bob Carter said in an interview.
“Crossovers are here to stay,” Carter said, echoing the belief that the industry is going through a “fundamental shift.”
One reason for the surge is the recovering U.S. economy. Pickups, in particular, routinely gain momentum as more businesses and contractors expand and replace existing vehicles that wore out during the downturn.
Decade-low gas prices have also played a role in the light truck boom. But industry officials insist that factor alone shouldn’t be overplayed, noting that there’s less and less of a mileage gap between today’s car-based crossovers and conventional passenger cars. The Honda Fit subcompact, for example, delivers 37 miles per gallon on the highway. The HR-V crossover based on the same platform still gets 34 mpg.
Even if there were an energy shock on the order of the twin hits of the 1970s, Ford’s LaNeve insists the impact would be marginal, leading to “a shift from bigger utility vehicles to smaller ones, rather than away from utility vehicles,” and back to passenger cars.
Even more important than cheap fuel, the light truck boom reflects the demand for more functionality, contends Chevrolet marketing executive Sandor Piszar. All-wheel-drive is a definite selling point, especially in colder climes. But the taller seating position of a utility vehicle means more space for cargo and passengers than in a conventional sedan with the same footprint, notes Piszar.
“People view them as more capable vehicles, and they also see a level of refinement they wouldn’t have gotten a few years ago,” he said.
Manufacturers have grown especially fond of crossovers and other truck models because they generally command a higher price than passenger cars. As a result, makers are not only adding more of these vehicles to their lines, but are also shifting production capacity from cars to trucks. Hyundai, which can’t make enough of its crossovers, will add the 2-row Santa Fe Sport to its Alabama assembly line, boosting output by more than 50,000 vehicles annually.
Fiat Chrysler CEO Sergio Marchionne earlier this month suggested his company may outsource production of two sedans, the Dodge Dart and Chrysler 200, to expand production of its truck models.
The shift does pose some potential problems for the industry as it faces the huge increase in the federal fuel economy mandate set for 2025. Officially, it calls for an average 54.5 mpg, though credits and other factors reduce that to the low 40 mpg range in practical terms. And the rules let big trucks get by with slightly lower numbers. But it still sets a tough target.
The industry is radically reshaping the trucks it builds. The Nissan Armada is one of the relatively few, classic body-on-frame SUVs left. Makers are migrating rapidly to lighter crossovers. Even with pickups, “lightweighting” has become an industry mantra. Ford significantly boosted fuel economy for its full-size F-150 last year by trading the old steel body for one of lightweight aluminum — and by adding a line of downsized, turbocharged engines.
Diesels have helped General Motors boost the mileage of the midsize Chevrolet Colorado pickup to 31 mpg, while FCA’s Ram 1500 EcoDiesel gets 29 mpg — numbers that would have looked good on compact sedans a decade ago.
Kia, meanwhile, used Chicago as a stage for introducing its new Niro, a dedicated hybrid CUV. A more advanced and efficient plug-in, likely to get more than 50 mpg, will follow a year later. Ford and GM are both expected to soon add hybrid pickups And Audi is set to launch a pure battery-electric SUV in 2018.
Automotive buyers can be notoriously fickle. The station wagons that ruled American roads in the '50s and '60s gave way to the minivans of the '80s and '90s. And the same could yet happen with light trucks. But barring some revolutionary new design concept, few see that happening anytime soon.