* Europeans forecast to buy 290,000 mini-SUVs this year
* Annual sales expected to reach 550,000 by 2016
* Mass-market automakers queuing to launch new models
By Laurence Frost
PARIS, March 5 In the gloom of Europe's
bottomless auto slump shines a relative bright spot, the
mini-SUV - and beleaguered mass-market carmakers are piling in
like excited joyriders.
PSA Peugeot Citroen, Ford and Renault
joined the stampede on Tuesday, showing new subcompact
crossovers at the Geneva car show, with Fiat and others
close on their heels.
Despite austerity and unemployment weighing heavily on
sentiment and car registrations in freefall - now approaching a
20-year low - city dwellers are queuing to pay a 3,000 euro
($3,900) premium for a slightly higher-riding runaround.
"It's not very rational," said Francois Bancon, the Nissan
upstream development chief behind the best-selling
Juke. "But we're not complaining."
The Japanese automaker, which unleashed the Juke's
muscle-bound physique upon the world in 2010 and logged more
than 97,000 European sales in each of the next two years, is
soon to be upstaged by French parent Renault.
The curvaceous Captur, a Renault Clio hatchback with more
body, and Peugeot's more obviously named 208 derivative, the
2008, will bump the Juke down to No.3 in the category next year,
according to forecasting house IHS Automotive.
Overall, cash-strapped Europeans will snap up nearly 290,000
mini-SUVs this year, IHS Automotive's projections suggest.
That's a gravity-defying 88 percent advance on last year's total
and triple the number sold in 2009, the year before the Juke's
Volkswagen and South Korea's Hyundai
, which clawed European business from mass-market
rivals last year, have been caught off guard and are two years
behind with their own offerings.
All of this is welcome news for Peugeot, Renault, Ford, Fiat
and General Motors' Opel brand as they struggle to halt
regional losses and declining market shares.
"They can underpin these vehicles with the same
architectures they have in the hatches and charge a damn sight
more, just because customers want something a bit different,"
IHS senior analyst Ian Fletcher said.
The surge comes at the expense of other small-car versions,
with traditional hatchback sales in 2013 expected to drop by a
third from their 2009 level, but the price mark-up makes it a
clear net win.
While the 2008's production costs are close to those of the
208 it is based on, Peugeot's crossover SUV starts at about
15,000 euros, compared with 12,000 for the hatchback.
The Ford Ecosport and Fiat 500X are both due later in 2013,
as the Italian car maker's chief executive, Sergio Marchionne,
bets on variants of the retro-styled 500 model to make up for
drooping sales of the ageing Punto hatchback.
Besides the Juke, the new models join Opel's Mokka, launched
in Europe last year and designed from the same GM platform as
the Chevrolet Trax, also about to go on sale.
London-based UBS analyst Philippe Houchois says that
car-buying customers gain clear benefits for their extra outlay.
"People the world over seem to like a higher driving
position," he said.
The front-wheel-drive powertrains that the new vehicles
share with ordinary minis enable them to combine 4x4 roominess
with small-engine fuel efficiency, he added.
For carmakers, the demand shift between vehicle types
delivers "more of a boost for pricing and mix than market
share", Houchois added.
Nonetheless, the stragglers are keenly aware that they stand
to lose business.
"We may be a bit late," a senior VW executive conceded.
"We've been attacking SUVs from the upper end, but the compact
and subcompact segments have great potential."
Hyundai and Honda are expected to introduce
subcompact crossovers in 2015, the year VW launches the Taigun,
a smaller version (and anagram) of its Tiguan SUV. A Toyota
competitor is slated for the following year.
"We've been asking to launch as soon as possible," Honda
Europe President Manabu Nishimae told Reuters, adding that his
Tokyo bosses wanted the United States and Japan to get the
Peugeot does not seem overly concerned about the arrival of
new rivals to the timely 2008.
"The fewer competitors there are the better, obviously,"
said Peugeot brands chief Frederic Saint-Geours.
"This market segment will begin to have more and more
competitors, but we're convinced it will continue to grow."
The forecasters agree, predicting a steady expansion to a
peak of almost 550,000 vehicles in 2016, with little risk of the
cut-throat price competition that has savaged carmakers' margins
in the rest of the market.
"The earliest entries will obviously have the best stab at
it," IHS's Fletcher said. "But in 2013 I don't think anyone
moving into that segment will have many worries."