Toyota exec predicts end of sedan dominance, displaced by compact SUVs
Despite creating one of the best-selling automobiles in history in the Camry, Toyota believes the archetypal sedan — nearly synonymous with the word “car” itself — may not be the prevailing mode of transportation for much longer. Its replacement? The compact SUV.
According to Bloomberg, top Toyota USA executive Bob Carter, speaking at a Toyota-sponsored holiday party in Detroit, foretold of a future in which the RAV4, the company’s compact crossover, outsells the Camry. Carter even put his money where his mouth was: “I’ll bet you lunch that will happen.” Moreover, he thinks this will happen within the next five years.
The Camry has been America’s best-selling passenger car for 13 years, and is estimated to reach 425,000 in sales by 2015’s end. Comparatively, Toyota predicts it will sell 300,000 RAV4s, up 16 percent from last year. However, together, compact SUVs — including the Honda CRV, Nissan Rogue, and Ford Escape — are already outselling mid-sized sedans.
What’s driving this shift in buying patterns? SUVs — or more precisely, car-based crossovers — are getting better mileage than when truck-based sport utilities first came into fashion in the 1990s. There’s no longer an economic penalty to be paid. Furthermore, after two decades of SUVs, millennial car buyers have grown up with those as the default vehicle of choice. As more of them make new car purchases, that notion seems deeply ingrained.
This comes as a surprise even for Carter. “Five years ago, if somebody would have said compact SUVs would be outselling mid-size sedans, I probably would have disputed that.” Toyota is ready for the change. Though most RAV4s sold in the US are build here, the automaker is already importing Japan-built RAV4s to meet demand. A new plant being constructed in Canada will be able to boost North American capacity to 400,000.