In the last few years, particularly in 2015, SUV and crossover models have swelled in popularity so much that automakers have been producing them in record numbers. However, inventories are now expanding and firms have been forced to offer generous incentives to sell them.
According to Bloomberg Technology, incentives on SUV models hit $3,663 last month, a $704 increase over the previous year.
Last year, SUV sales in the United States rose by 8 per cent over 2015. However, the percentage sales growth was almost half the 16 per cent rise recorded in 2015 compared to 2014, suggesting that the growth in the market is losing steam.
According to LMC Automotive analyst Jeff Schuster, “The competition in the SUV segment is fierce and is going to heat up even further as you have more new entries and redesigns.”
If you’re in the market for an SUV, now could be the time to buy. Certain Jeep dealerships are offering up to $4,500 off the 2017 Cherokee while Chevrolet has created no-interest 72 month loans for the Tahoe and Suburban. Discounts on the Honda CR-V have also increased by $700 while those for the Toyota RAV4 have soared by about $1,000.
LMC Automotive suggests that by February 1, automakers had over 1.6 million SUVs in their inventories, an incredible 34 per cent more than a year prior.
“There was an overbuild of SUVs. The manufacturers wanted to make sure they’re not caught without SUVs to sell,” Schuster said.
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