Tuesday, March 1, 2005

SPOTLIGHT: Sport utility vehicles

Hitting the road

MORE and more sport utility vehicles, or SUVs, are on the road these days, and more of them are being produced in Canada, according to a new study.

Since 1999, SUV production in Canada has increased dramatically, even though overall automotive manufacturing has stalled.

SUV production surpassed the output of both minivans and pickup trucks in Canada in 2004, according to the study, which examines production and sales trends in light-duty motor vehicle manufacturing in Canada and the United States from 1999 to 2004.

Between January and September last year, SUVs accounted for 18% of total light-duty vehicle manufacturing, which consists of passenger cars, vans, minivans, pickup trucks and SUVs. This was nine times the proportion just five years earlier.

Auto manufacturers

Automotive manufacturers in Canada churned out 350,000 SUVs from January to September 2004. This surpassed the total of 331,634 SUVs that they produced in the entire year of 2003.

What it means is that the Canadian automotive industry is benefiting from one of the largest and fastest growing market segments in North America.

The nation is also reaping economic benefits, as the motor vehicle industry accounted for nearly 13% of the total manufacturing sales in 2002. Ontario motor vehicle makers alone employed more than 42,000 workers in 2002, or 4.7% of the province's employment in manufacturing.

Despite recent record high prices for crude oil, North American consumers have had a big appetite for SUVs, which tend to be less fuel efficient than passenger cars. Sales of SUVs reached all-time highs in both Canada and the United States in 2003.

Light-duty market

In 2003, US consumers bought 4.5 million SUVs, the equivalent of one SUV for every four vehicles sold. This market has increased at an annual average rate of 8.9% since 1999, when SUVs held 19% of the light-duty vehicle market.

The Canadian market for SUVs has also grown, but sales remain relatively lower than in the United States.

In 2003, dealers sold 272,000 SUVs here, which comprised 17% of all light-duty vehicle sales in Canada that year, up from 12% in 1999. Sales were up 10.7% a year on average during this period.

This occurred despite warnings from environmental groups, which claim that sport utility vehicles guzzle more gas and pollute more than cars.

Sales of light trucks in the United States (about half of which are SUVs) remained strong during the first nine months of 2004 in spite of continued increases in gasoline prices.

But in Canada, during the same period, SUV sales have declined while overall light-duty vehicle sales slumped.

For more information, contact Erik Magnusson (613-951-0218), Manufacturing, Construction and Energy Division.

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© 2004, 2005 Statistics Canada.