Hot Trend: Small SUVs, “City Utes,” On the Rise Among Younger Buyers

Remember the Suzuki Samurai? Well, it has grandchildren.

They’re called “City Utes,” or city-sized utility vehicle. The newest genre on the market is smaller than a Honda CR-V and Ford Escape but still packs the punch of a sporty utility vehicle…only in miniature. Like a fun-size candy bar, this one has all of the fun and none of the guilt.

So who do you think it markets to? That’s right: the “hyper-social, young, more often female than male…who lives within urban activity and demands car connectivity.”So says Chevy, the maker of the popular Trax model, out last December.

Piggy backing off of our last blog about Millennials and the way they buy, this article reveals another profound way these new buyers are changing the market. Often with a lower budget and without need of a family vehicle, this demographic gravitates toward what meets them where they are: smaller, cooler vehicles with lots of options and a really tiny footprint.

This kind of vehicle simply did not exist in the U.S. until Buick released their Encore in January 2013. The Mini Countryman was first to market here in 2011, but the brand has such a boutique following that it didn’t make much of a dent in the market, though apparently it was the best selling Mini in 2014. With the release of Chevy’s Trax, these three commanded a buyer’s edge of 72,276 in a 5.4 million market —and that’s enough of a dent to take notice of.

The mini-SUV trend is only growing from here. Honda joined the fun-sized party with the HR-V, Mazda has the CX-3, Fiat makes the 500X and Jeep introduced the Renegade in March, 2015 with a decent show. Experts predict a decline in larger SUV sales over the coming years, and an increased growth in these smaller SUVs as urban areas become more popular places to live. Smaller parking spaces require smaller vehicles—just ask any European.

While Ford does offer a mini-SUV called the EcoSport in other markets worldwide, they’re not bringing it to the United States…just yet. Toyota is also conspicuously absent from the roster and has no immediate announcements to sign on. The Rav4—around since 1996—seems to still sell well enough here to suit them fine for the time being.

All of this to say, look how the little ones move mountains? Smaller SUVs satisfy Millennials’ particular value-based matrix of criterion: social connectedness, budget-friendliness, appropriate cool factor and environmental responsibility. These factors matter deeply to them, and they’ll buy accordingly. Millennials are used to getting what they want, and the market is going to accomaodate them, (just like mom and dad always did back in the day). Pay attention to this group and enjoy the ride. Their potential to build your business is powerful. ATC Courses are at the cutting edge, where all the potential lies in today’s changing automotive market. Call today to set up your team for an advantage!