Hey there, time traveller!
This article was published 4/4/2014 (907 days ago), so information in it may no longer be current.
SOUTHFIELD, Mich. - Winter's wrath has taken its toll on auto dealers, but there's an upside: booming sales of all-wheel drive models.
Even as auto sales have been slowed this winter by record cold and snow, brands known for their AWD offerings have fared well.
In February, when U.S. industry-wide sales were little changed, Subaru sales climbed 24 per cent and Jeep deliveries jumped 47 per cent. Last year, almost one in four autos sold in the U.S. were equipped with all-wheel drive, according to IHS Automotive.
Once a feature found mostly on big trucks, AWD is poised to be the biggest thing since heated seats, featured on luxury sedans and tiny wagons. An all-wheel drive transmission allows all four wheels to propel the car, or any combination of the wheels depending on traction conditions.
Total U.S. auto sales were little changed in February at almost 1.2 million vehicles, following a 3.1-per-cent decline in January, as record snowfalls and frigid temperatures kept buyers out of showrooms in many regions of the country.
The shift to AWD, though, started long before the snow began to fly this winter. Sales of cars and sport-utility vehicles with AWD jumped 79 per cent in the U.S. from 2009 through 2013, while overall industry-wide sales grew 53 per cent for those models, according to IHS Automotive using Polk vehicle registration data.
In 2013, vehicles equipped with AWD accounted for 23 per cent of all autos sold in the U.S., up from 19 per cent in 2012, IHS said.
For Ford, sales of all-wheel drive cars and SUVs nearly tripled from 2009 through 2013, rising 189 per cent, said Erich Merkle, the company's sales analyst. That increase excludes Ford's pickups, such as its top-selling F-Series models. Ford's Escape small SUV helped drive the gain.
"Escape and Explorer sold exceptionally well last year," Merkle said. "That bumped up our numbers."
Chrysler said it also has seen a tripling in AWD demand since 2009. And now Mother Nature is even cooperating.
"The severe weather has been ideally suited for our legendary Jeep 4X4 capability," Reid Bigland, Chrysler's U.S. sales chief, said in a statement. Sales almost doubled last month for GM's Buick Encore small SUV and the Chevrolet Equinox compact SUV had its best February ever, the company said. GM said sales of its crossover models -- SUVs built on car frames instead of truck chassis -- rose four per cent last month, while its overall sales fell one per cent.
The rise of AWD is an outgrowth of the surge in sales for small SUVs, such as the Escape, the Honda CR-V and the Toyota RAV-4, said Mark Wakefield, an analyst for consultant AlixPartners in Southfield. Baby-boomers entering empty-nest years are shifting from large, truck-based SUVs and family cars into compact crossover utility vehicles.
"There's an expectation when you get into a crossover that it's going to be 4-wheel drive," Wakefield said. "The average buyer says, 'This is a safety thing, why wouldn't I do this?'"
For the automakers, these small SUVs make more money because they share the mechanical underpinnings of high-selling compact cars. Ford's Escape is based on the frame of its Focus small car. The Honda CR-V shares its underpinnings with the Civic compact. The Toyota RAV-4 is built on the same chassis as the Corolla. By spreading the cost of developing and building these models, automakers boost profitability.
As AWD sales soared, the cost of the option has also come down, making it more affordable on relatively inexpensive cars, said Kevin Tynan, auto analyst with Bloomberg Industries.
"You don't need to spend $50,000 anymore to get all-wheel drive," said Fox, the New York dealer.
The feature also is more fuel-efficient than it once was because it is being outfitted on models built on lightweight car foundations, rather than heavy truck chassis.
"For the extra $1,500 to $3,000, people feel like they need it," Tynan said. "It's about fuel efficiency and utility and the perception of that safety with all-wheel drive."
-- Bloomberg News