The switch from sport utility vehicles to crossover utility vehicles in North America is helping to keep some Canadian auto plants humming, says a Bank of Nova Scotia report.
Crossovers, which combine the ride of a car with the space of an SUV, should become the largest segment in the North American market next year, displacing mid-sized cars, Carlos Gomes, a senior Scotiabank economist, said in his monthly examination of the auto industry.
"CUVs have existed as a segment only since the 2000 model year and, like SUVs in the 1990s, the segment has witnessed phenomenal growth, climbing from only 7 per cent of overall Canadian and U.S. vehicle sales in 2002 to more than 17 per cent so far this year," Mr. Gomes said. "However, in contrast to the SUV craze, which peaked in 2003, demand for crossovers should continue to expand over the next decade."
That will help Canadian production, because several assembly plants in Ontario crank out CUVs. Among them are those run by Ford Motor Co. of Canada Ltd. in Oakville, Ont., Honda of Canada Mfg. in Allison, Ont., Toyota Motor Manufacturing Canada Inc. in Cambridge, Ont., and Cami Automotive Inc., a joint venture of General Motors of Canada Ltd. and Suzuki Motor Co. Ltd. in Ingersoll, Ont.
More Report on Business Stories
Two Chrysler Canada plants also make CUVs, but there are reports out of Detroit that the auto maker is about to end production of those vehicles.
Output of CUVs is set to increase in Canada next year when the new Toyota plant in Woodstock, Ont., comes on stream.
High gas prices and a proliferation of new models in the CUV segment are helping to drive sales. Fuel economy of CUVs is better than that of SUVs in part because they are lighter in weight.
In addition to knocking mid-sized cars out of the leadership spot, CUVs have also helped to send minivan sales skidding.
Sales of minivans are down 18 per cent from 2006 and are on pace to slide to 1.1 million units in Canada and the United States this year, down from 2.1 million at the peak in 1999.
3