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Market trends: The fortunes of 4x4s

Last spring, there was lots of talk about how sales of off-roaders had dropped, with newspapers and TV news claiming that we were downsizing in the face of rising fuel prices.

In fact, nothing of the sort was happening – in early 2006, both off-roaders and executive models were enjoying sharply rising sales. As we said then, downsizing is likely to happen in the future, but there was no sign of it then.

It now seems that the future may be arriving. Sales of off-roaders are retreating almost as fast as an Alpine glacier. The interesting thing is that the bigger they are, the harder they are falling.

Overall year-to-date market share is down from 7.2% in 2006 (the second highest figure ever, incidentally) to 6.5%, despite new models such as the Honda CR-V. However, sales of prestige models are down by 19%, with only the Range Rover increasing sales due to its new V8 diesel engine.

Admittedly some sales have been lost because of buyers waiting for the new BMW X5, but, excluding the X5, the drop is still well into double figures.

A couple of bad months do not prove a trend change, so the next few months will be examined intently.

Even without the green debate, this may not be altogether surprising. The SUV market has been driven by fashion – and fashion, by definition, changes. The real surprise is just how long the SUV boom continued – it seems that people got used to the high driving position and did not want to give it up.

For evidence of the fashion factor, you only have to look at Porsche. Both the Boxster and 911 sell in gradually increasing numbers year-in, year-out: they are classics that don’t go out of fashion.

In contrast, the Cayenne saw sales drop by 45% between 2004 and 2006.

The market for smaller off-roaders is likely to prove more robust. Models like the Honda CR-V diesel produce around 170g/km of CO2, which is not great, but it is a long way from the 225g/CO2 threshold for punitive taxation.

The model that everyone will be watching is the Nissan Qashqai, which offers SUV styling without the guilt.

#AM_ART_SPLIT# At the other extreme is the Range Rover. Despite being the flag-carrier (indeed the inventor) of the luxury SUV market, it is now a genuine luxury car.

The models more likely to suffer are those priced £30,000-40,000 as an alternative to executive models. If I was at Land Rover, I would be more worried about Discovery than the Range Rover.

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