The day Mexicans swapped cheap, small cars for SUVs

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Manufacturers have rushed this migration to respond to market demands, but also because higher SUV prices have helped improve their margins.

More and more people are opting for crossovers or SUVs, which combine a bold look, increased ground clearance and a spacious interior, focused on practicality. This furor has prompted automakers to reduce investment in the development of sedans and hatchbacks and to focus more on SUVs.

But this change has not only transformed the type of vehicles we see on the streets, but also the number of zeros that come on their price tags.

The crossovers are almost identical, mechanically, to equivalent sedans and hatchbacks. In most cases, they are even based on the same platform. The reason for the price difference is, to some extent, that drivers have shown that they are willing to pay more. 30% of new vehicles sold in Mexico are SUVs, according to data from the Mexican Association of Automotive Distributors (AMDA).

The average value of an SUV is between 40,000 and 90,000 pesos higher than that of an equivalent sedan or hatchback. A hatchback, like the Mazda 2, costs 323,900 pesos, while the CX-3 crossover, which is mounted on the same platform, costs 366,900 pesos, according to the prices listed on the brand’s website.

A compact sedan, such as the Kia Forte, which currently costs approximately 351,900 pesos, is almost 90,000 pesos cheaper than the Sportage compact SUV, which shares the same platform, which starts at 439,900 pesos. Honda CR-V sells for 559,900 pesos, while the Civic sedan with which it shares structural elements costs 422,900 pesos.

“SUVs continue to be in high demand in terms of sales and constitute a constantly growing part of the Mexican market,” Guillermo Rosales, AMDA’s deputy general manager, said at a press conference earlier this month. In contrast, smaller and shorter vehicles have been losing ground. “In recent years, the mix of hatchbacks and sedans has been declining, compared to SUVs within total sales,” says Josué Castañeda, product planner at Toyota Mexico.

Like any fashion item, from a Nike Air Jordan shoe to the latest soccer jersey, the high consumer cost is at least in part due to high demand. But in the case of SUVs, the price gap versus sedans and hatchbacks is due to other factors as well. The extra height and size of the SUVs means more glass and steel. And in some cases, suspension components need to be strengthened to cope with off-road tasks. Larger wheels and tires also cost more.

Manufacturers have rushed this migration to SUVs to respond to market demands, but also because the higher prices consumers pay have helped improve their margins. This has motivated more than one manufacturer to say goodbye to sedans and hatchbacks. Ford, for example, decided to stop selling all cars except the Mustang in North America.

And if a manufacturer stops selling a certain model in the United States, it will surely do so in Mexico as well. “Mexico is a market that moves in line with the consumption trends of other larger ones such as the United States. The large volumes sold there to make other smaller markets adapt to these trends, as has happened with SUVs ”, says Castañeda.

That is not to say that SUVs are a purely aesthetic option and do not offer real benefits to drivers. Castañeda lists a few: the higher position of the seat allows greater visibility, a greater height from the ground allows better to avoid the bumps and larger and wider tires resist potholes better. In terms of cargo capacity, hatchbacks and sedans can’t compete. For many, these advantages are worth the difference in price.

Practically speaking, SUVs also have their downsides. In addition to the additional purchase price, there are the higher maintenance costs. They also generally consume more gas than a similar car due to the higher weight. For example, a Tiguan and a Jetta have the same engine, but the SUV will spend approximately 3,000 pesos more on gasoline for a year, according to estimates from the government portal Ecovehónicos.

Although the supply has been reduced in recent years, sedans and hatchbacks still offer different benefits: They are generally lighter, easier to park and more fuel-efficient.

Source: expansion.mx

Mexico Daily Post