When automakers released U.S. new car sales for August on Friday, the numbers confirmed that buyers really like compact sport utility vehicles (SUVs) like the RAV4 from Toyota Motor Corp. (NYSE: TM) and the Chevy Equinox from General Motors Co. (NYSE: GM).
The RAV4 was Toyota’s best-selling vehicle in the month, with sales of 43,265 units, up 30% year over year and up 17% for the year to date with sales of nearly 270,000. The RAV4 now outsells the company’s long-time best-seller, the midsize Camry.
The RAV4 trailed the perennial best-selling vehicles in the country, though. The F-Series pickups from Ford Motor Co. (NYSE: F) and the Chevy Silverado pickup sold 77,007 and 54,448 units, respectively, in August.
The base price for a RAV4 is $24,410, compared with a base price of $23,070 for a Camry, and it’s no secret that U.S. car buyers have favored SUVs over passenger cars for some time now. Camry sales fell by 7% year over year in August. Among the top 20 most popular vehicles for the month, not a single passenger car posted a gain.
American car buyers see crossovers and SUVs as more versatile than passenger cars and low gasoline prices have made the vehicles, which are generally less fuel-efficient than cars, more attractive.
GM’s Chevy Equinox posted a huge 85% year-over-year surge in August sales, and this compact SUV is now GM’s second-best selling vehicle. Year to date, sales of the Equinox match the RAV4’s 17% gain.
Toyota’s average incentive spending per vehicle rose 19% year over year in August to an estimated $2,876, compared with an industry average increase of 13% to $3,799 per vehicle. Only Honda and Subaru showed smaller year-over-year increases for incentives among the 12 major brands sold in the United States.
August was only the second month ever that the RAV4 sold more than 40,000 units, but the juggernaut may just be getting rolling. With low entry-level pricing, low gasoline prices, a vast dealer network and a strong advertising presence, Toyota’s RAV4 could remain the company’s best-selling U.S. vehicle for a long time.
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