CR-V Sales Softening Amid More Aggressive Competition

SAN ANTONIO – The Honda CR-V has been the top-selling Middle CUV in the U.S. since overtaking the Ford Escape in 2012.

And CR-V sales went up and up for roughly the next three years, to where the vehicle became not only the No.1-selling model in WardsAuto’s Middle CUV segment, but also the No.1-selling CUV or SUV in the U.S., period. CR-V sales hit a record 345,647 units last year.

But now Honda is under fire by chief rival Toyota and pretty much every other automaker on the planet as CUVs grow in popularity and replace cars in many American garages.

“It’s been public knowledge (that) Toyota has said, ‘We want to bring in more vehicles.’ Nissan has said, ‘We want to bring in more Rogues.’ So everybody is going after (the segment), and it’s gotten more competitive, without a doubt,” Jeff Conrad, group vice president-Honda Div. for American Honda, tells media here during a ’17 Honda Ridgeline preview.

Toyota, typically the brand most often cross-shopped against Honda and vice versa, has been vocal about its desire to sell 400,000 RAV4s annually in the U.S. by 2017. It appears to be on its way to doing so, if recent data is any indication.

For the first time in six years, the RAV4 outsold the CR-V in January through April, 106,274 to 100,101, registering an 18.2% 4-month increase against the CR-V’s 2.4% decline.

The RAV4 has had eight consecutive months of sales increases in the U.S., while CR-V sales fell below year-ago in six of those eight months.

And unlike last year, lack of availability is not an issue for the Honda CUV. The CR-V had a 79-days’ supply at the end of April, WardsAuto data shows, higher than the industry average of 71 days for light trucks. Toyota had a 54-days’ supply of imported RAV4s last month, and a 44-day supply of Canadian-built models.

Conrad concedes age also could be playing a role in the CR-V’s decline. The current generation has been out since 2011 and is in the final year of its lifecycle, with a new generation launching next year.

Also possibly impacting the CR-V is the new, smaller and less-expensive Honda HR-V. The subcompact CUV went on sale in the U.S. in May 2015 and has performed better than expected. HR-V sales stood at 22,484 through April, pacing toward a 90,000-unit sales year when 70,000 annual deliveries were predicted at its launch.

With Toyota ramping up production of the RAV4, Nissan doing the same with the Rogue and Ford vowing to reclaim its crown with a new, refreshed Escape, it appears the Middle CUV field only will get tougher.

But Honda will defend its turf, Conrad says, without elaborating on what measures will be taken.

“We kind of feel like we were there first and we had such a strong following, we kind of own a heavy (portion) of that (segment) and we want to retain that as we move forward,” he says.

Honda is notoriously conservative when it comes to incentive spending, but it may have to loosen the purse strings if it wants to more effectively compete, at least until the next-gen CR-V arrives.

While the ’15 and ’16 CR-V have $500 in college-graduate or military-member cash available at the moment, the ’15 and ’16 RAV4s have $750 in cash on the hood for those two buyer groups.

The former can be financed at 0.9% APR for 24-36 months or 1.9% APR for 37-60 months, while the latter has 0% financing for 60 months.

But incentive data doesn’t tell the whole story. Leasing is becoming increasingly popular in all segments including midsize CUVs. In the Detroit area, a ’16 CR-V LX base model can be had for $219 per month for 36 months with $1,999 due at signing, according to automobiles.honda.com. Meanwhile, a comparable ’16 RAV4 LE is $199 per month for 36 months with $1,999 down, shows buyatoyota.com.

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