Bigger in Size but Similar in Price... 'Compact SUVs' Racing to Threaten Sedan Market Position

[Asia Economy Reporter Kiho Sung] Domestic automobile manufacturers have been fiercely competing in the small sports utility vehicle (SUV) market since early 2020. While Kia Motors' Seltos, launched in September last year, maintains a strong position, Korea GM and Renault Samsung Motors have each thrown down the gauntlet with the Trailblazer and XM3, respectively. As competition among companies intensifies, both price competitiveness and product quality are improving simultaneously, making it a good choice for customers considering new cars.

According to the Korea Automobile Manufacturers Association on the 8th, domestic passenger car sales last year totaled 1,294,000 units, a decrease of 4,000 units from 1,298,000 units the previous year. However, sales of small SUVs with engine displacement under 1600cc surged by 33% to 225,000 units in 2019, up from 169,000 units in 2018. In an increasingly challenging automobile market each year, small SUVs have become a breakthrough.

The biggest reason for this popularity is that small SUVs are no longer "small." The Seltos measures 4,375mm in length, 2,630mm in wheelbase, 1,800mm in width, and 1,615mm in height. The Trailblazer ranges from 4,410mm to 4,424mm in length, has a 2,640mm wheelbase, 1,810mm width, and height between 1,600mm and 1,635mm. The XM3 measures 4,570mm in length, 2,720mm in wheelbase, 1,820mm in width, and 1,570mm in height.

Considering that the Sportage is 4,485mm long, has a 2,670mm wheelbase, 1,855mm width, and 1,635mm height, these vehicles are by no means "small." In fact, the Trailblazer and XM3 have greater height and wheelbase than the Sportage.

The size exceeding that of small SUVs is especially appealing to customers purchasing their first car. An industry insider said, "Customers in their 20s and 30s buying their first car tend to choose vehicles with marriage and childbirth in mind," adding, "Spaciousness is increasingly necessary as family members grow, which is why small SUVs are gaining popularity."

Price competitiveness is also a factor in their popularity. The XM3's 1.6GTe model ranges from 17.19 million to 21.40 million KRW, and the TCe260 model ranges from 28.3 million to 25.32 million KRW. The Seltos is priced between 18.81 million and 28.65 million KRW, while the Trailblazer ranges from 19.10 million to 27.11 million KRW. Considering that Hyundai Motor's compact sedan Avante is priced between 13.76 million and 21.59 million KRW, the difference is not significant.

An industry insider said, "SsangYong Motors previously hit a jackpot by selling the small SUV Tivoli at the price of a compact sedan," adding, "Because of competitiveness in price and size, the competition in the small SUV market will become even fiercer."