Motoring

The rise of the SUV: why traditional people-movers have taken a back-seat

landrover discovery

Bruce Newton

Posted May 03, 2022

They cost more, are less fuel efficient, and often handle much worse than a people-mover. So why are SUVs dominating the new car market?

The sales numbers don’t lie. The SUV is now Australia’s favourite passenger vehicle.

While three-box passenger sedans like the Ford Falcon and Holden Commodore once took pride of place in our driveways and on our highways, high-rise wagons are these days the go-to choice.

The trend has been with us for a least 20 years and has accelerated in the last 10.

Back in 2000, the official VFACTS sales number for what was then officially dubbed all-terrain wagons was 105,510.

In 2011, now known by the US-inspired Sports Utility Vehicle sobriquet, sales had more than doubled to 244,136. By 2021, they had more than doubled again to 531,700 to claim more than 50 per cent of the market.

So why have Australian new vehicle buyers gone SUV-mad?

“It’s part logic and part emotion,” asserts Ross Booth, the global chief of car valuation experts Redbook. “SUVs appeal to the head and to the heart.”

Are SUVs more style than substance?

The logical bits welcomed by the rational side of the brain include functionality and perceived safety. 

The emotional bits? Well, that more plays into the origin of SUVs as ‘go anywhere adventure’ machines. In terms of self-image, it’s certainly more empowering to drive a vehicle like this than, say, a people-mover.

Sure, for many families a people-mover would actually make more sense because they do a better job of fitting and carrying people and stuff than an SUV or traditional passenger car. But nothing says urban servitude more than a people-mover and judging by their minute sales, Australians aren’t interested in that.

But the reality is that many SUVs on sale now have little more off-roading ability than the passenger cars or people-movers they have usurped. While SUVs trace their origins back to WW2 Jeeps and – more specifically for Australians - generations of Toyota LandCruisers, they have evolved to something far more car-like.

Where a ’Cruiser has a body that bolts to a ladder frame to help provide the extra wheel travel critical off-road, 4x4 drive to all four wheels and a second set of low-ratio crawler gears to scramble up and down steep mountains, most modern SUVs are built around the monocoque concept that integrates frame and body in one just like a passenger car.

Virtually none have low-range gearing and a significant percentage drive only two wheels. Many of the smaller more affordable SUVs don’t even offer an all-wheel-drive option. Their main link to off-road origins is a little extra suspension clearance and tough-looking cosmetic body cladding.

When the tax break 4x4s enjoyed against their passenger car alternatives was equalised by the federal government, it instantly made 4x2 SUVs more affordable and helped increase the popularity of SUVs, allowing buyers access to models like the Honda CR-V, Nissan X-Trail and Toyota RAV4 at a cheaper price point.

“Another key factor was the rise in popularity of novated leasing,” explains Mazda Australia marketing director Alastair Doak. “It meant people could choose what car they wanted as part of their salary package rather than just being handed a Falcon or Commodore.”

2022 Peugot SUV

The SUV is now Australia's favourite passenger vehicle - but should it be? 

Moving with the times

There is probably no brand on-sale in Australia that has worked the SUV boom harder or benefited more than Mazda. 

Back in 2000, it sold 27,505 vehicles and did not have a single SUV in its line-up. In 2011, when the Mazda3 small car ended the Commodore’s 15-year run as Australia’s top-seller, it had risen to number four with 88,333 sales and had two SUVs in its line-up.

By 2021 it was number two in the market with more than 100,000 sales and offered five SUV models which accounted for more than 60 per cent of its showroom traffic.

And now it’s doubling down.

A new generation of more luxurious five-and seven-seat models starts rolling out later this year that will be added to the line-up. The first is CX-60, a cab-back looker with a sloped coupe-ish roof and a price premium over the similarly-sized CX-5 medium SUV.

At the same time, it appears the Mazda6 passenger car flagship of the range is on borrowed time.

“I can’t see us never having a passenger car in our line-up, but clearly SUVs are now very important,” says Doak.

The expansion and diversification of SUVs has been embraced and encouraged by automotive brands globally. Those experiencing success generally have a strong SUV line-up. 

 

Porsche macan

Off-roading might be a bit much to ask of some modern SUVs. 

Spoiled for choice

It doesn’t hurt that manufacturers can charge more for SUVs than the equivalent passenger car. They don’t necessarily cost more to make; they are just more in demand. As a result, choice is enormous. There are about 150 different models on-sale in Australia, most of which offer multiple equipment grades. 

Brands without strong SUV line-ups are struggling. The sad collapse and closure of the Holden can in part be traced back to poor buyer reception for its hodgepodge of SUV offerings sourced from different divisions of its parent, General Motors. 

New niches keep being created.

SUVs can be tiny or huge, square and solid, or sloped and sexy, thirsty petrol V8s, four-cylinder diesels, hybrid or even pure electric. The price diversity is enormous; the cheapest SUV sold in Australia is the $19,490 Suzuki Ignis. The most expensive is the $659,000 Rolls-Royce Cullinan. A Ferrari SUV is also coming.

“We think the SUV boom will continue,” predicts Booth. “Maybe the passenger car segment will revive but that’s not what we expect. 

“There is more and more SUV choice emerging and more and more people seem keen to buy them.”

At the end of the day, whether you buy an SUV comes down to a few pros and cons for you to decide which is more true for you:

Why you should buy an SUV

  • The wagon body provides functional ease of use for a busy family with an active lifestyle.
  • The higher seating position delivers a better view over the road, providing a safer driving experience.
  • If you want to tow, then big SUVs are a good choice, vying with utes in that role.

Why you shouldn’t buy an SUV

  • Often being heavier than passenger cars, they can consume more fuel and be slower.
  • A higher centre of gravity and more weight negatively affects handling and ride.
  • A people-mover is a more sensible choice as family transport – unless you want to go off-road, which most people don’t.

 

The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product(s) issued by Insurance Manufacturers of Australia ABN 93 004 208 084 AFS Licence No. 227678.