SUV Owners Won't Downsize Just Because of High Gas Prices

Gas prices aren't changing the minds of SUV owners to switch over to sedans, according to the latest data from automotive research firm AutoPacific.

In a survey of more than 300 current SUV owners, the firm found that most of them would not consider downsizing to a smaller SUV or switching to a sedan when making their next vehicle purchase.

But 45 percent of those surveyed said that they'd consider making the switch to a hybrid or plug-in hybrid (PHEV) SUV or crossover the next time they're car shopping.

"Most new traditional gasoline SUVs get much better fuel economy now than they did when fuel prices spiked in 2008 and caused a shift in the market," AutoPacific president and chief analyst Ed Kim said in a press release. "Couple that with an influx of hybrid, PHEV and EV SUV offerings and consumers have so many choices that they don't have to downsize or change vehicle types."

Toyota RAV4 SE Hybrid
The Toyota RAV4 SE Hybrid in silver. Toyota Motor Sales U.S.A. Inc.

More than a quarter of respondents said that gas prices won't affect their next car purchase decision at all, but about the same amount said that they would consider a fully electric SUV or crossover for their next car.

AutoPacific's projections indicate that the SUV segment will continue to have a hold on the overall market, reaching a market share of more than 60 percent by 2027.

About 16 percent of total SUV sales in 2021 were alternative powertrain models, which AutoPacific expects to also increase over the next five years. By 2027, the firm expects that number to grow to about 42 percent.

At the end of the year, AutoPacific estimates that 15.5 million light vehicle units will be sold, with the industry continuing to be hampered by supply chain disruptions. Those low inventories will continue to be passed on to the consumer, which may weaken their purchasing power when combined with steadily increasing interest rates.

2023 Honda HR-V
The 2023 Honda HR-V goes on sale this summer. American Honda Motor Co., Inc

"As transaction prices rise, people who are acquiring new vehicles during this time are likely to be more affluent, so market share of higher priced segments, such as luxury SUVs and pickups, is forecast to grow this year even as supply remains constrained," Kim said.

Of the top 25 selling cars in the U.S. in 2021, 16 of them were SUVs, showing their continued dominance in the market.

The best-selling SUV in 2021 was the Toyota RAV4, which sold about 407,000 units last year. That was followed by the Honda CR-V and the Nissan Rogue, which saw about 361,000 and 285,000 units leave dealer lots, respectively.