When Toyota (TM) launched the RAV4 and Honda turned out the CRV in 1996 and 1997, the "crossover" market was born. Looking little more than like "Lite" Jeeps, these cars were more about "utility" than "sport" in the overall sport-utility category. No more. As demand has grown, auto designers are pumping as much creative energy into crossovers as they have sports cars and sedans, hoping to differentiate themselves by fashion rather than simply function.
Take the Jeep Compass, which shares an engineering platform with Chrysler's (DCX) new entry-level subcompact, the Dodge Caliber. It hardly looks like it could withstand the rigors of the Rubicon Trail like its bigger and tougher siblings. The Compass will be available in both front- and four-wheel drive, and is Jeep's first front-wheel-drive vehicle.
CUBBIES AND CUPHOLDERS. "The Compass is tough, for sure, but it takes the brand into a new pricing area and will bring in a younger customer," says Trevor Creed, Chrysler's senior vice-president for design. "The styling isn't so much rugged as it is cool," says Jeremy Connabe, 20, a Jeep enthusiast who likes the design and thinks his friends at the University of Michigan will agree. The car arrives in 2007 as a 2008 model.
The crossover is the auto industry's fastest-growing segment, with U.S. sales expected to grow from 2.5 million vehicles this year to 3.5 million by 2010. They're drawing in buyers from both the truck-based SUV and passenger-car categories.
The new Mazda CX-7, which goes on sale in the spring, is styled closer to Mazda's passenger cars than its SUV offering such as the Tribute. "Functional is a given among crossovers. You have to have the cubbies, cupholders, and seat configurations that people expect. But it's the fashion and style you achieve that separates these cars -- just like with sports cars," says Mazda North America chief Jim O'Sullivan.
"HOT AND COMPELLING." The trendsetting crossovers that changed the category's design landscape are the BMW X5, the Nissan (NSANY) Murano SUV, and Infiniti FX45, say car company executives and designers. Those cars effectively did what few people thought could be done: blend sports-car attributes with the packages available for SUVs. "People don't think of just one thing or have just one mood when they are choosing the car they want to live with everyday," says Nissan's head of global design Shiro Nakamura.
How serious are carmakers about crossovers? Ford (F) is launching one called the Edge in the fall. Analysts expect Ford to make sure it can pump out enough new crossovers to meet demand by announcing that it will drop its weak-selling, much-criticized Freestar minivan later this month. That will make room at its factories to produce more crossovers for Ford, Lincoln, and Mercury.
"There is no question that crossovers are where we need to be, and that they have to be as hot and compelling as cars like our Mustang," says Mark Fields, president of Ford operations in the Americas.
NO ROCKY RUTS. The Edge's unique features include a panoramic "Vista Roof" incorporating a 27.3- by 29.4-inch front moonroof, which can tilt and slide open, as well as a 15.75- by 31.3-inch fixed rear glass panel. It will be available with either front- or all-wheel drive.
Ford has been selling big, hulking SUVs such as Explorer, Expedition, and Excursion. But design chief Peter Horbury says "the Edge is not an off-road adventure vehicle, and it doesn't look like one." The same can be said for the Lincoln MKS crossover, which is built on the same platform as the Edge but has finer interior treatments for the Lincoln crowd.
Road handling is far more important for crossovers than any trail driving. For the most part, off-road vehicles are built on so-called body-on-frame chassis common among pickup trucks. Crossovers, however, are constructed on the same platforms as cars. Drive a Ford Explorer, and it's not that much different from driving an F-Series truck.
EASY RIDE. But drive a crossover such as the Edge, or the Toyota RAV4, and it resembles the smooth-driving Ford Five Hundred or Toyota Camry sedans. A successful crossover design offers features that appeal to SUV customers, such as higher sitting position than most cars and space that can accommodate kids and gear.
The Hyundai Santa Fe, a crossover introduced by the Korean carmaker in 2001, put the auto maker on the map with a new generation of buyers. Its curvy shape, differentiating it from competitors like the Honda CRV and Ford Escape, was designed by Americans for the U.S. market.
Hyundai brought out a new version of the Santa Fe at the North American International Auto Show in Detroit, and it's longer and even more refined. That will help set it apart from Hyundai's other crossover, the Tucson, which went on sale in 2004 and was too close to the original Santa Fe in size and proportions, according to Hyundai dealers. The new Santa Fe offers a third row seat, too.
CROSS-GENERATIONAL APPEAL. At the auto show this week, Hyundai also is showing a crossover concept, the HCD9 Talus, that's clearly influenced by the Infiniti FX45 and the Nissan Murano. Moreover, it may be the company's boldest design statement to date. Even BMW thinks so. It shows "that Hyundai is well beyond just obsessing over processes and efficient manufacturing, and is looking to be a real player in design," says BMW Chairman Helmut Panke.
The crossover market is being driven not only by younger consumers who don't want a balky gas guzzler but by baby boomers who are getting older and in some cases battling maladies such as arthritis. Midsize and full-size SUVs such as Ford Explorer and Toyota Land Cruisers, with high step-in heights that require drivers to hoist themselves in, are becoming less popular with buyers beyond age 50. Stylish crossovers give such buyers plenty of the utility they liked in big SUVs but with more comfort.
With about 59 million baby boomers at one end of the target market, and 57 million Generation-Y consumers in their teens and early 20s at the other end, a twentysomething today actually may be able to drive his or her parents' crossover and enjoy it.
Kiley is BusinessWeek's Marketing editor in New York
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