SUV global sales fall in H1 2019. FCA loses ground

Global vehicle sales totaled 44.75 million units in H1 2019. The volume fell by 6.8% following the deceleration USA and Europe, and the drop in China. With the exception of pickups, all segments recorded drops during the first half. This includes the SUVs, which have been the driver of growth during the last 7 years.

SUV global sales fell by 3.1% in the first six months to 15.06 million units. One year earlier, between January and June 2018, SUV volume totaled 15.54 million units. Although it is first drop registered since the start of the SUV boom some years ago, market share jumped from 35.9% in H1 2018 to 37.5% this year (of passenger cars).

China ruins the party

The main driver of growth was also the main responsible for the drop. The strong demand of SUVs in China allowed this segment to top the global ranking since 2013. However, the problems with private credit among consumers and the trade war is even affecting the demand of these popular vehicles. SUV global sales fell in H1 due to China, down by 15%.

Despite the increasing offer, consumers in China are reluctant to buy as many SUVs as before partly because many of them are waiting for a new incentive package from the government. In addition, the electrification is also forcing some clients to postpone their purchases as many of them are waiting for more convenient powertrains.

In contrast to the Chinese situation, the SUV market experienced good times in the other key markets. USA-Canada demand increased by 2% to 4.30 million units, and European volume totaled 3.17 million units, up by 6%. SUVs counted for more than 40% of total passenger car sales in 19 markets; USA and China are among them.

FCA’s SUVs lose ground

Fiat Chrysler was one of the Western automakers (Chinese excluded) to post the highest market share lose in the SUV segment during the first half. While total SUV global sales fell by 3.1%, FCA posted a decline of 8% during the same period, with its volume falling from 992,300 units in H1 2018 to 908,100 units in H1 2019.

The Italian-American maker’s market share decreased by 0.3 percentage points to 6.1%. They lost one position to Honda, and it is now the 7th largest SUV seller. The old line up of SUVs explain the negative results. The average age of the current SUVs of FCA is 5.5 years. The market waits for all-new Grand Cherokee (2010), Durango (2011) and Journey (2009).

In the other hand, there are also challenges regarding the very small offer. The group has 11 different SUVs in its product line up. This is quite a very small quantity if compared to some of its rivals. Renault-Nissan offers 30 SUVs, and General Motors has 26 different SUVs in its lineup. With only 11 models, it is difficult to gain traction.

All FCA brands need more SUVs

Jeep was the world’s fourth SUV brand in H1 2018. One year later it occupied the 6th position, being outsold by Hyundai and Volkswagen, astheir sales increased by 12% and 40% respectively. Jeep’s volume fell by 9% to 733,100 units in H1 2019 (excluding the volume of the Gladiator, which plays in the pickup segment).

The brand continues to lag behind its rivals in terms of choices: only 5 global models. There are not 7-seat Jeeps for global markets; there is nothing smaller than the 4.25m long Renegade (did anyone say India?). There are not coupe SUVs (the new trend). And there is nothing more luxury than the Grand Cherokee. Jeep needs more products.

While Jeep SUVs count for 80% of FCA’s SUV global sales, the rest of the brands have a timid role. Dodge needs urgently a new Journey and Durango, besides new models to hit in the compact segments. Alfa Romeo needs to wait until 2021 to see the Tonale, and there are no signs of full size SUVs; Fiat has only one SUV (500X) and it seems that only Brazil will get more models (Toro SUV in 2020). Maserati also needs a midsize SUV and something bigger than the Levante. Chrysler? Abarth? Ram?

Source: FGW database, OICA, own estimates, JATO, Bestsellingcarsblog, Autodata, Focus2move, Autonews

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