Carmakers rush to join small crossover trend

Small crossovers, a downsized combination of sports utility vehicle (SUV) and passenger car, were a big hit at the Geneva Motor Show this week, with m

Small crossovers, a downsized combination of sports utility vehicle (SUV) and passenger car, were a big hit at the Geneva Motor Show this week, with many manufacturers keen to squeeze into the promising niche amid an otherwise depressed market.

The French group PSA Peugeot Citroen gained a foothold in the segment by unveiling its first small crossover, the Peugeot 2008.

'Five years ago, this kind of vehicle represented less than one percent of the B segment (urban vehicles) in Europe,' Peugeot's brand chief Maxime Picat told AFP.

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'This could rise to 10 or 15 percent by the end of this year with the multiplication of offers' by global automakers, he added.

For now, only one actor is present in this market: Nissan of Japan with its Juke model, which was launched in 2010.

In Europe, the company sold 140,000 of the cars last year.

'We've got the lead on that segment,' Nissan chief John Martin told AFP.

But the Japanese carmaker won't remain alone for long. Besides Peugeot, Renault of France, American giant General Motors (GM) via its Chevrolet and Opel brands and Fiat of Italy are also getting in on the action.

'The fact that our competitors are following us in many respects is a testimony of the success of our own strategy,' Martin insisted.

After first being snubbed for heavy fuel consumption and ensuing environmental impact, these pint-sized SUVs have increasingly been embraced by consumers.

European drivers like their small, compact size that makes it easy to park in town, combined with substantial luggage capacity and the fact that drivers sit higher than in a normal passenger car, experts at the Geneva show said.

'European consumers are not going to increase the size of their garage, but they still want the capabilities of all-wheel drive,' explained Chevrolet's chief in Europe Susan Docherty.

Such requirements are at the heart of the crossover design, with wide tires, high ground-clearance, and high-set seats that can been folded down to enlargen the boot, packed into a shell that is only a few centimetres longer than a classic town car.

'Drivers want to stand out,' said Agnes Tesson Farget, who is in charge of Peugeot's new 2008.

Renault said it was targeting young couples with children with its new Captur crossover, which it unveiled at the Geneva show.

Families 'want a bigger vehicle without moving to the more expensive MPVs,' explained Benoit Bochard, who heads the company's small vehicle segment.

He referred to multi-purpose vehicles known more commonly as minivans.

The Captur will for instance carry a starting price of 15,500 euros ($20,100) in France, where an MPV sells for no less than 20,000 euros, he said.

A positive point, carmakers said, is that unlike MPVs, which are widely appreciated in Europe but not as much elsewhere, the small crossovers can sell all over.

'City customers have pretty much the same expectation, regardless of what continent they are on,' Picat said.

These vehicles also offer a big advantage for carmakers at a time when car sales are plunging in Europe and where some companies, like PSA, Ford, GM and Fiat, have suffered deep losses.

They can basically be built on the same frame as smaller models but can be sold at a higher price, which will mean better profit margins, according to Polk analyst Bertrand Rakoto.

Peugeot's 2008 is initially being put together at the PSA Peugeot Citroen plant in Mulhouse, in eastern France, and will later move to plants in China and Brazil.

Renault has decided to produce the Captur in Valladolid, Spain, in place of its small MPV Modus.

First Published Date: 13 Mar 2013, 17:35 PM IST

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