Yet Another Reason that SUVs Were a Smart Bet for VW

These days it seems like every member of the Volkswagen Group is coming out with a new SUV. There’s the Atlas and the Tiguan, the Bentley Bentayga, the Audi Q8, and even the Lamborghini Urus, to say nothing of the new SUVs coming out in non-North American brands, like Skoda and SEAT.

Yes, it’s a veritable gold rush and VW running into it like it’s California in 1849. Why, though, is VW (and the rest of the motoring world) so eager to jump into the SUV market? Well, it’s about more than just sales.

Sales, it must be said before moving on though, are a big deal. It may not have escaped your notice that when you drive down a residential street there’s an SUV in nearly every driveway. And yet somehow the market has shown no signs of saturation. Despite the wealth of lifted and vaguely off-roady vehicles in America we, apparently, want more.

And that’s attractive to automakers. But another aspect of SUV ownership that gets talked about a little less is that people drink from the SUV well tend to return to it. According to a recent IHS Markit study, two-thirds of SUV and crossover owners who bought another vehicle in 2017 bought an SUV.

Consumer loyalty, in fact, rose from nearly 53% in 2012 to 66% now. Whereas only about half of owners, in the wider world of cars, are loyal, two-thirds of SUV owners buy another SUV. While other segments are losing loyalty—the proportion of hatchback, van, coupe, and even pickup buyers returning to the market is falling, although weirdly convertible customer retention is going up—SUVs only gain customers.

And one of the reasons for that trend is that customers who owned other types of vehicles are now buying SUVs. According to IHS Markit, in the first four months of 2017 two-thirds of sedan-owners in the market for a new vehicle bought an SUV instead of another sedan.

So for VW, although it might be a little late to the SUV party, the new Atlas and Tiguan stand a much better chance of attracting new customers and holding onto them than the Passat or the Golf.

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