The Urban Utility Vehicle

Specific segments of the U.S. automotive industry have been around for years, including the Sport Utility Vehicle (SUV), Minivan, Truck, Sedan, Hatchback, Coupe, Convertible, and Roadster. However, as consumer demand changes, so does the design of new products. One of the more recent additions came in the form of the Crossover Utility Vehicle, a vehicle that does not fit into an existing category. Vehicles such as the Ford Edge, BMW X3 and Ford Flex are commonly considered to be CUVs. However, as the industry continues to develop new vehicles, it may be time for a new category, the Urban Utility Vehicle (UUV).

In large cities, there is still a group of consumers who want to buy and drive a fun vehicle. This population may live downtown, or a bit outside the city center, and want to own a vehicle that will be capable of driving around the city and on the slick roads in the winter, as well as reflect a unique image that the young consumer has. The vehicle has to be not only edgy, but also draw looks as it drives down the street. The ideal UUV also needs to be practical, and not be a full size SUV such as a Ford Expedition or Cadillac Escalade. These consumers want more than just another SUV/CUV, but still want to feel safe in the vehicle they are driving.

The vehicle segment which truly fits this mold is the Urban Utility Vehicle. Not only does the vehicle create its own unique niche in the market, but it defines a generation of city consumers who are otherwise difficult to label.

The UUV is creating its own market with the recent launch of a vehicle like the Nissan Juke, which could be considered a subcompact SUV built with the younger consumer in mind. The vehicle drives like a sporty SUV which allows the consumer to weave within traffic and a design that feels capable in snowy weather. This combination puts the Nissan Juke in the category of UUV. The Nissan Juke drives as consumers would expect: it is fun, fast, and a perfectly compact for those living in a large city.

Image: Nissan Juke

Source: Nissan

However, it is important to note that the UUV is not just for the younger consumer, but also the newly retired. These consumers are approaching their sixties and seventies and want to stay active, and do not want to drive large sedans. UUVs offer a higher point of view, but are also compact enough to offer better fuel economy. The new groups of retirees are moving away from golfing and gardening, and instead are active heading into their later years, choosing to spend time with their grandkids and participate in fitness classes. Though opposite of the young city dweller, the newly retired fit the demographic for the UUV vehicles as well.

The UUV market is more extensive than the Nissan Juke. The UUV market also includes the Range Rover Evoque, which fits into a category of the trend setter. This vehicle is marketed to the trendsetter consumer who purchases products as soon as they come out, or seeks out unique products that no one has heard of. The Range Rover Evoque is for the younger affluent city dweller, for which there is a strong market in major metropolitan cities. The Range Rover Evoque is perfect for consumers in areas such as New York, Boston, Chicago, Washington D.C., Philadelphia, and other cities where consumers aged 25-35 are living and working downtown, and want a vehicle which they identify with. The higher sticker price of $43K-$52K will keep it to a limited market, however, the technology features, dynamic look, and SUV capabilities make it the type of evolution that Land Rover needs, just in time for the evolution of the younger car buyer.

Image: Range Rover Evoque Coupe

Soruce: Land Rover

Though the Nissan Juke and the Range Rover Evoque both fit the UUV mold, there are more vehicles which will compete in this segment. The BMW X1 and the Audi Q3 are also going to compete in the UUV market. The Audi Q3, which has a strong resemblance to the Audi Q5, will be the new UUV for the Audi brand. The Q3 will offer the same great driving experience that consumers can expect from an Audi. The BMW X1 continues the branding that has made BMW successful, with all the iconic features a consumer would expect. However, the competition in this market will be fierce. While BMW and Audi have a strong dealer network and larger group of owners, the Range Rover Evoque is in the market, and has an advantage of being very different for the UUV market. And we can expect to see more development from all brands luxury and non-luxury as these vehicles become more popular.

Audi Q3

Source: Audi

BMW X1

Source: BMW

For more information on the US automotive industry, check out our US SUVs and crossovers market reports.