AutoMobility LA 2017: B-segment UVs from Hyundai, Nissan, Mitsubishi take a bow
Three new B-segment utility vehicle (UV) segment entries arrive in 2018, introduced at the 2017 AutoMobility LA show on 29 November.
IHS Markit perspective
- Implications:The B-segment utility vehicle (UV) segment continues to grow more crowded in the US, as automakers shift to meet consumer demands for this body type. Hyundai, Nissan, and Mitsubishi offer similar approaches, tailored to suit each brand's objectives.
- Outlook:Among the similarities of the vehicles is a level of technology and creature comforts. Although these entries are small in size, consumers expect the availability of these features, and expanding their availability across model lines improves profitability. The automakers have strived for these B-segment UVs to convey flexibility and freedom for the urban environment. These vehicles deliver compact exterior dimensions, reasonable fuel economy, and plenty of cargo space. The fundamental emotional attraction of these vehicles is capability.
The Hyundai Kona, Mitsubishi Eclipse Cross, and Nissan Kicks were among the utility vehicles (UVs) introduced at the 2017 AutoMobility LA show in Los Angeles, California, United States, on 29 November. Sales in the B-CUV (crossover utility vehicle) segment in the US were a modest 264,000 units in 2014. With increased offerings introduced in recent years, as automakers cater to a shift in US consumer tastes, the segment's sales reached almost 575,000 units in 2016. By 2021, IHS Markit forecasts CUV sales in the US will reach 767,000 units. In 2014, there were four entries in the US CUV segment; in 2021, the segment is forecast to have 15 entries. The packaging of a UV can be more attractive than that of a typical B-segment sedan, and typically consumers are willing to spend more on the UV. The higher price point, along with automakers seeing benefits from applying increased technology across more vehicles in their portfolios, is supporting increased technology availability. Hyundai, in particular, notes that it expects owners of larger UVs will consider switching to the Kona, and it has supported those buyers with increased creature comforts. The Nissan Kicks and the Mitsubishi Eclipse Cross offer similar features, although they are looking more directly at an entry-level positioning.
Hyundai's Kona went on sale first in South Korea in the second half of 2017. The US version will go on sale in the first quarter of 2018. Hyundai will offer two powertrains for the US version, including a 147-hp 2.0-litre Atkinson cycle 4-cylinder engine mated to a 6-speed automatic transmission. An up-level option will be the company's 175-hp 1.6-litre turbocharged, direct injection engine, mated to a 7-speed DCT. Consistent with market demands for technology, the Kona will be available with a strong complement of driver assist features and connectivity. The driver assist features are bundled together under a package called Hyundai Smart Sense, and include forward collision-avoidance assist with pedestrian detection, driver attention warning, lane keeping assist, blind-spot collision warning, rear cross-traffic collision warning, and high-beam assist. The connectivity and technology options will include Android Auto, Apple CarPlay, an available 8-inch navigation system (standard screen size is 7 inches), Hyundai's next-generation Blue Link, a head-up display, rain-sensing wipers, and wireless device charging. Hyundai's Blue Link enables connection to Google Assistant and Amazon Alexa, with some features able to be controlled by wearable devices. The convenience options include a colour LCD gauge cluster, powered driver's seat, leather heated seats, automatic air conditioning, and proximity key.
The Kona's design is what Hyundai characterises as athletic and bold, positioning the vehicle as ready for "urban adventurers". A distinct look for the vehicle is also created by LED headlights and daytime running lights. Dark fenders over the wheel arches contribute to an aggressive look for the vehicle. The Kona comes as standard in front-wheel drive form, with optional all-wheel-drive (AWD) system. The transmission, suspension, fuel, and exhaust systems have been packaged in such a way as to provide 19.2 cubic feet of rear cargo volume. The Kona's AWD system is designed for sure-footed driving on a variety of road surfaces and in various climates, although it is not necessarily aimed at off-road driving.
The Nissan Kicks is another entry that has been on sale in global markets ahead of the US market. The Kicks is also aimed at urban environments, and boasts a strong complement of technology. The model's sales in the US begin in June 2018, as a 2018 model-year product. The Kicks offers only one powertrain, a 125-hp 1.6-litre 4-cylinder engine, and it is offered only in front-wheel drive configuration. The Kicks takes Nissan's current design language and shrinks it to the smaller class. This includes the V-motion grille and the floating roof look. As with the Kona, the Kicks will be offered in two-tone colour schemes.
Nissan has also ensured a strong complement of technology availability. NissanConnect, Apple CarPlay and Android Auto are available through a 7-inch full colour display. The Kicks also offers a premium sound system, developed by Bose through its small vehicle series, tailored to the vehicle's size. Driver assist and safety technology options include Nissan's intelligent around-view monitor, automatic emergency braking, forward collision warning, blind-spot warning, and rear cross-traffic alert. In comparison to the Kona, the Kicks has a shorter options list and smaller engine, although the Nissan showroom offers a more robust utility vehicle line-up. Nissan is positioning the Kicks as an affordable, entry-level vehicle - although tuned for current consumer preferences, this entry vehicle takes the shape of a UV. Although the Versa and Versa Note remain in Nissan's range, the automaker sees in the Kicks an opportunity to provide more economical access to UVs, and in offering an option for those entering the new-vehicle market for the first time. The Kicks is expected to deliver a 33-mpg combined fuel economy, according to Nissan. Nissan says the Kicks is just right for "active, urban new-vehicle buyers", according to a statement by Dan Mohneke, senior vice-president of sales and marketing operations, Nissan Division.
Mitsubishi Eclipse Cross
Mitsubishi introduced a US version of the Eclipse Cross at the AutoMobility show on 29 November. In resurrecting the name of its successful coupe, offered from 1989 to 2011, Mitsubishi is counting on positive consumer recollection of the name. This strategy may help ease the marketing costs associated with introducing a new model, as there is awareness of Eclipse as a Mitsubishi name.
Image courtesy of Stephanie Brinley, IHS Markit.
The Eclipse Cross brings several features to the Mitsubishi range, although nothing new to the market. The Eclipse Cross offers a full-colour head-up display, 7-inch touchscreen, heated rear seats, and Mitsubishi Connect. The company also announced that the model's US pricing will start at USD23,295. The Eclipse Cross has a 1.5-litre direct-injection turbo engine providing 152 hp. The company's AWD system (called super all-wheel control) is standard on US models, and is based on the system already known in the Outlander models. The Eclipse Cross will offer driver assist systems leveraging both radar and camera sensors, including blind-spot warning and lane-change assist, rear cross traffic alert, forward collision mitigation, lane departure warning, adaptive cruise control, multi-view camera, and automatic high beam. The Eclipse Cross offers Apple CarPlay and Android Auto compatibility, although no optional embedded navigation system.
Outlook and implications
These three entries will contribute to the growth in the overall segment. Among the similarities between them is the level of technology and creature comforts. Although these entries are small in size, consumers expect the availability of these features, and expanding their availability across model lines helps improve profitability. The automakers have strived for these B-segment UVs to convey flexibility and freedom for the urban environment, in contrast to the off-road master Jeep Wrangler, also introduced at the 2017 AutoMobility LA show, or the Toyota FT-AC concept at the same show. These three new models deliver compact exterior dimensions, reasonable fuel economy, and plenty of cargo space, and are well suited to city environments. Topped off with a look as though they could conquer notably more, their fundamental emotional attraction is flexibility and capability.
In some ways, these new CUVs are in contrast to the direction of mobility products and expectations for a new consumption of transportation. These vehicles are designed to support an active, driving-orientated lifestyle, and they take cues from vehicles designed for much more rugged use.
Each of these vehicles has a somewhat different importance for the brands they support. The Kona is white space for Hyundai. Consistent with Hyundai's approach to the market, the vehicle offers more than several entries in the segment, as the brand works to develop a range with strong value for money. Rather than offering inexpensive, basic transportation, Hyundai is looking to offer more than consumers expect at each price point it serves. With the Kona, Hyundai's UV range has been expanded to four models; it joins the Tuscon, Santa Fe Sport, and Santa Fe. Hyundai is also planning to bring to the market a larger three-row offering, as well as developing a lifestyle, urban pick-up truck for late in this decade. IHS Markit forecasts the Kona will see a US annual sales volume in the range of 44,000 units in its first full years on market; this will account for about 6% of Hyundai's US sales volumes, as well as give it about 6% share in the B-UV segment. The Kona will also contribute to increasing Hyundai Motor America's total UV sales to nearly 38% of its US sales mix by 2020, compared with 28.7% in 2016. Globally, the Kona represents an opportunity for sales volumes of more than 200,000 units per year through the decade.
Nissan's Kicks brings the brand's UV line-up to six models, sitting below the Rogue, Rogue Sport, Murano, Pathfinder, and Armada. IHS Markit forecast the Kicks' US sales will be just less than 49,000 units in 2021; the entry is forecast to account for about 4% of the brand's US volume in 2021. Nissan's other UV products will outsell the Kicks, although adding an entry vehicle is an opportunity to bring customers in at an earlier age and hopefully retain them as they move through their lifetime. Nissan is also forecast to increase its mix of UVs sales in the US market; in 2016, UVs accounted for about 37% of Nissan's US sales. In 2021, IHS Markit forecasts this will reach 46%. Globally, the Kicks is forecasted to see an annual sales volume approaching 180,000 units.
Mitsubishi will also see UV sales increase in the US with the new entry, but this brand has a much smaller portfolio than the other two. Its portfolio is also already UV heavy, as the only car it currently sells in the US is the entry-level Mirage. Still, the addition of the Eclipse Cross will help the brand increase its UV sales in the US to 75% of its sales mix in 2021, compared with 62% in 2016. In the US, IHS Markit forecasts sales of the Eclipse Cross in the 22,000-units-per-annum range. Globally, the new model is forecasted to deliver about 95,000 units of sales volume in 2020, slipping somewhat in 2021.
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