Welcome back to the latest episode of The Future of Automotive on CBT News, where we put recent automotive and mobility news into the context of the broader themes impacting the industry.
I’m Steve Greenfield from Automotive Ventures, and I’m glad that you could join us this week.
America’s love affair with larger and larger vehicles continues.
According to data from Nat Bullard, vehicles, on average, weigh about the same today as they did back in 1975. But, the change in the distribution of vehicle segments has been dramatic over the past 50 years.
In 1975, 80% of new vehicle sales were sedans or wagons and almost zero percent trucks and SUVs.
Fast forward to today, and only 25% of new vehicles are sedans or wagons, and 45% are trucks or SUVs.
So while the average weight of new vehicles sold hasn’t really changed, we’re selling a ton more trucks and SUVs today.
Looking across the top 10 vehicles sold in 2024 really illuminates this. We see a number of full-sized pickups and large SUVs on the list.
According to Ed Kim, the President of AutoPacific, there are two main reasons why vehicles are bigger in the U.S.
Ultimately, it comes down to the price of fuel. Americans definitely complain about the price of gasoline, but the reality is that gasoline is taxed far less in the U.S. than in almost any other country in the world.
Cheap fuel allows Americans to drive far larger vehicles and less fuel-efficient vehicles compared to drivers in most other parts of the world.
Relatedly, American roads are designed to accommodate the larger vehicles we have due to the cheaper fuel we’ve historically had. Streets are wide, and even most parking spaces are sized to accommodate larger vehicles.
Recent data from The Economist shows that a driver is 7x more likely to die when hit by a Ford F-150 vs. a Toyota Camry. Knowing this, would you really put your teenage kid into a subcompact car???
The Insurance Institute for Highway Safety (or IIHS) backs up that notion, stating that a bigger, heavier vehicle provides better crash protection than a smaller, lighter one (assuming no other differences between them).
When it comes to American preference for larger and larger vehicles, I think the toothpaste is out of the tube and is going to be really hard to get back in.
As more people buy larger cars, the tendency to want to match the size increases. That’s especially true in suburban areas, where there’s more space and bigger driveways.
I don’t know how we can ever provide enough incentives to take this trend in the alternative direction and have consumers migrate back towards smaller cars.
So, with that, let’s transition to Our Companies to Watch.
Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my weekly Intel Report, we showcase a company to watch, and we take the opportunity here on this segment each week to share that company with you.
Today, our new company to watch is VisionAST.
VisionAST provides franchised automotive dealers and their warranty providers with profit-driving sales analytics.
VisionAST is a data-driven analytics platform built for dealers by dealers to bring more profit to your bottom line. Uncover critical information from your DMS data and use it to increase profit.
VisionAST help generate thousands of dollars in additional profit each month for dealers across the United States.
If you’d like to learn more about VisionAST you can check them out at www.visionast.com.
So that’s it for this week’s Future of Automotive segment.
If you’re an AutoTech entrepreneur working on a solution that helps car dealerships, we want to hear from you. We are actively investing out of our DealerFund.
Don’t forget to check out my first book, “The Future of Automotive Retail,” and my brand-new book, “The Future of Mobility”, both of which are now available on Amazon.com.
Thanks (as always) for your ongoing support and for tuning into CBT News for this week’s Future of Automotive segment. We’ll see you next week!
