With the popularity of sport utility vehicles expanding worldwide among young and older buyers, Ford Motor Co. plans to capitalize on the trend by adding four new SUV nameplates to the company’s product portfolio within the next four years.
Mark LaNeve, Ford vice president of marketing, sales and service, said during breakfast meeting that opened the Chicago Auto Show that demographics hold the key to the continued growth of the SUV market.
“As members of the 80-million strong millennial age group enter their prime child rearing years, a leading indicator of more SUV sales, nearly 80 million aging baby boomers continue to prefer their SUVs,” he said.
“It’s a demographic doublewhammy and it all points to one thing, more SUVs for the foreseeable future,” LaNeve added.
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He also noted that Ford’s market research that indicated that once millennials begin thinking about starting a family, their interest in shopping for an SUV increases significantly. While they have tended to delay starting families because of economic challenges, there yet-to-form households represent additional growth potential for companies like Ford, he added.
Millennials alone aren’t expected to drive SUV growth. Aging baby boomers tend to stay with SUVs because they are easier to get in and out of than passenger cars, which sit lower to the group, LaNeve said. Baby boomers also feel younger and believe they appear more active, while driving an SUV, LaNeve suggested during his remarks.
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Low gas prices have also contributed to the growth of SUV sales in recent years. The new group of SUVs to hit the market offer big improvements in fuel economy, he said. Even an increase in fuel prices would not push consumers back towards passenger cars, he added.
“Some SUVs now rival the fuel efficiency of V6-powered midsized sedans from only a few years ago and as baby boomers grew up with less efficient vehicles, they tend to appreciate the efficiency of Ford’s newest SUVs,” LaNeve said.
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Even if gas prices go up, the cost of refueling costs for the owners of modern SUVs will be much less than during the spike in gas prices that crimped the last boom in SUV sales, LaNeve stressed.