January 18, 2007

Compact vehicles gain market share in the U.S., says J.D. Power

Westlake Village, California – Compact vehicles continue to gain a greater share of the U.S. new-vehicle market, fueled by the availability of more models, according to a report by J.D. Power and Associates.

The compact vehicle share of the total new-vehicle market rose from 27.9 per cent in 2005 to 31.2 per cent in 2006. During the same time period, midsize vehicle share dropped from 42.8 to 40.4 per cent, while large vehicles declined from 29.3 per cent to 28.5 per cent. In 2000, compact vehicles accounted for just 23.8 per cent of the market.

“Growth in the compact vehicle segments is being driven, in part, by an increase in the number of models and the popularity of small crossover vehicles,” says Tom Libby, senior director of industry analysis at Power Information Network. Libby also says that price, styling, functionality and gas prices have contributed to the compact vehicle share growth.

Compact vehicles are moving off dealer lots faster than they used to, and much quicker than the typical new vehicle. Five of the seven segments with the fastest turn rates in the industry in December 2006 were compact vehicle segments, with the compact premium compact utility vehicle (28 days) and compact basic car (35 days) ranking one and two.

Segment loyalty of compact vehicle owners is increasing as well, particularly in the non-luxury sector. In the fourth quarter of 2006, 56.4 per cent of all owners of non-luxury compact vehicles traded for another one, up from 51 per cent in the fourth quarter of 2005. The percentage of owners of midsize and large non-luxury vehicles trading to a compact vehicle rose as well, from 20.8 per cent to 25.8 per cent among owners of midsize non-luxury vehicles, and from 7.0 per cent to 9.1 per cent among large non-luxury vehicle drivers.

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