We break down 3 trends in the automotive industry that your marketing department can count on this week’s article.

It’s a tough to make predictions in the midst of a once in a century disruption. The following three trends don’t have a clear causation with the pandemic, so they represent a direction in the industry comfortably independent of the current chaos.

1. Customers want SUVs and brand doesn’t matter

Sedan sales continue to slow while mid-size vehicles reached a significant milestone. For the first time, mid-sized vehicles like SUVs and crossovers made up more registrations than compacts.

Utility vehicles make up the largest segment in the mid-size market. In January 2021, utility vehicles were 60% of registration, up 4 points from the previous year. Meanwhile, sedans have a mere 19% market share in July, the lowest mark since 1987. SUVs hold 56%, with 70% of the luxury market.

This comes at a six-year low in brand loyalty, meaning the shift in body preference isn’t tied to a specific OEM.

2. Hybrids and EVs are growing in popularity

EV loyalty rates are at 55%, up from 34% charted a mere five years ago. I’ve talked in this space many times about the improved technology that’s helping fuel these numbers, and once again, that tech is only getting better.

IHS Markit forecasts Hybrids and EVs to grow globally by 70% by the end of the year . And remember, the higher the rate of adoption, the more infrastructure grows to address concerns of those who haven’t taken the plunge. We’re at a very real tipping point between EV and internal combustion.

Here is a case where the pandemic does throw a monkeywrench into things. The chip shortage presently picking your lots clean hits EVs harder than other kinds of cars. But when that’s dealt with, and that is a priority for the government, look the numbers to climb even more dramatically.

For the first time, mid-sized vehicles like SUVs and crossovers made up more registrations than compacts.

3. Captive loans drive demand

Worried over cratering demand during the early days of the pandemic, many OEMs offered low-and no-interest loans with extended terms and payment deferrals. Unsurprisingly, this helped slow the drop in brand loyalty.

With these generous loans, captive loans made up 51% of all purchases in 2020 and around 90% of leases.

Captive buyers tend to return to the market more quickly than other buyers and their brand loyalty is greater. This customer base is an attractive one and a good target for your marketing budget.

All three of these trends look to continue into 2022 and beyond. As always, keep an eye on this space for more breakdowns of the industry.

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Author Justin Robinson-Prickett

Justin Robinsion-Prickett is a content writer from Los Angeles with over a decade of experience in the auto industry under his belt. When not working, he enjoys fencing, re-editing dialogue in old movies to remove articles, and playing with his two dogs James Westphal and Dr. Kenneth Noisewater.

Join the discussion 4 Comments

• James Foreman says: December 13, 2021 at 11:42 am Thanks for the information! Great Post Reply
• cindy says: December 14, 2021 at 7:40 am SUVs hold 56%, with 70% of the luxury market. REALLY? Reply
• Christy Warbington says: December 15, 2021 at 11:53 am SUVs are still leading the pack with Hybrids and EVs growing as well. Important for dealers to know! Reply
• Austin Bekken says: December 21, 2021 at 2:45 pm I wonder what the impact of inventory has been on these automotive buying trends. Reply

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