Hyundai Kona and the crossover bubble
We are reaching the point where there are just too many crossover cars in the market. But what happens next?
An automaker releasing a new crossover model. Does that still qualify as “news”? What about adding that the newcomer is expected to boost the company’s sales and make it more competitive in a given region? Journalists should already have created a template to make it faster to write articles about those cars. This time, it would be filled with “Hyundai”, “Kona” and “Europe”. While such repetitiveness seems funny at first, one needs to notice that it can have a rather bitter end.
Do you remember – or have you read about – how was the automotive market two, three decades ago? There were convertible, coupé, hatchback, pickup, sedan, station wagon… A number of options which was already big. The most important difference from today’s offering was that each of the available models had a very specific purpose. People who bought one body style would certainly never consider any other. Such segregation is precisely the target of the changes which the market has undergone ever since.
All body styles have some disadvantages in everyday use, so even their target audiences are bound to wish there were other ones which could suit their needs and wishes. Parallel to that, since there were so many models competing in each of the existing categories, all of them tend to have lower sales. In other words, people wanted cars that bundled the perks of several body styles in a single one, whereas companies were willing to find new market niches in which to invest. The rest of the story is very well-known.
After attempts of many shapes, sizes and prices, in the 2000s the automotive industry converged to the crossover car as we know it today. It offered the imponent and rugged look of the SUVs on the outside, while the cabin was as roomy as that of a minivan. Adding the typical refinement of sedans and the two-box shape to make maneuvers easier only rendered the package irresistible. People were absolutely thrilled to have so many positive characteristics in the same car and the industry was absolutely interested in supporting that.
Unsurprisingly, that scenario changed as the years passed. At first, generalist companies work around the clock in order to offer as many crossovers as possible. Then, the ever-growing sales of this body style began to allure companies which would never consider such a product five years earlier. Today, literally every big automaker offers at least one of those – most of them allow you to choose between three or four. Since this means there are more than a hundred models of this category currently available around the world, one can’t help but wonder: is the crossover automobile a bubble about to burst?
The short version of the answer is that something is likely to happen, indeed, but “burst” is too strong a word to define it. It’s more accurate to say this bubble is about to slowly deflate.
As previously mentioned, the biggest intention of a crossover car is to offer the advantages of several other body styles together while leaving aside each one’s disadvantages as much as possible. Even though such intention is highly commendable, it has an important flaw when defined that way: it fails to acknowledge that people are different. They have different tastes and demands. Therefore, it’s impossible for one type of car to be good for all of them. Even a car which allegedly offers the best of all worlds.
People who drive in the city all the time are usually not really interested in all-wheel-drive. Those who focus on fuel efficiency actually reject high-output powertrain. Big families tend to avoid the coupé-inspired design of some crossovers, and so on. Everyone wants a car of many qualities, but each person finds a different set of qualities ideal. If the industry neglected that and kept offering the same type of crossover, the product would soon dissatisfy the public and lose its very reason of existence. In order not to lose its most recent gold mine, automakers had to reinvent it.
Some of the latest crossovers aim at subsets of the original clientele. The BMW X4 offers a very sporty interpretation of the concept; the Jeep Renegade caters to outdoorsy people; and the Volkswagen Tiguan Allspace is dedicated to families. In many countries, it’s possible to say that there are crossovers tailored to several particular tastes. The traits which make them suitable to one public and not the others can be as subtle as the design of the roofline or as blatant as the choice of the traction systems made available.
From the point of view of the public, such variety is great. Not only does it allow many tastes to be pleased, it makes the market more competitive, which impels automakers to offer better products. Nevertheless, it can be potentially deadly to the crossover automobile. Why is that? Because it means spurring diversity in a car concept which was born from the very idea of bringing everyone together.
People like when companies go the extra mile to deliver what they want. It makes them feel included, respected. As a result, if there’s one company in a given market segment which does that, they will tend to buy more from it. In other words, now that automakers are making their crossovers more focused, people will pay less and less attention to the generic ones. In the long run, people will move towards cars of more specific purposes and, therefore, away from the original concept of crossover automobile.
As you can imagine, this is bad news for many companies. Crossovers which don’t have that edge will simply become unattractive next to those which do, so their makers would only be able to keep sales high by reducing their prices. And even if they resorted to such unlikely possibility, no one wants to offer a product which has been rendered irrelevant.
In a first thought, the best solution to that problem seems to be doing the opposite: investing more and more in differentiation. However, this option turns out to be just as undesirable, but for another reason: it implies the creation and offering of many cars at once. The automaker would be forced to segment its lineup, such as by region or customer profile, and would end with excessively complex and expensive production activities whose financial return would certainly be low.
And why is Hyundai illustrating this story? Because of the unfortunate fact that its current crossover lineup suffers from both the aforementioned problems: there are too many models and most of them are too generic.
By the time this article was written, the Kona increased a base list which already included Creta, Tucson and two versions of the Santa Fe (with short and long wheelbase). “Base” because you can also consider the two previous generations of the Tucson, which are still offered in some countries; the off-road trim levels of urban cars (like the Brazilian HB20X and the European i20 Cross), which can be considered followers of the crossover concept; and all the crossovers offered by the sister brand Kia.
Sure, Hyundai has undergone a huge evolutionary process over the past few years, and now offers products with the same standards of the best automakers in the world. However, that is no longer enough. The more people want their specific needs fulfilled, the more likely they’ll be to look elsewhere for buying a crossover. Besides that, the remaining potential customers will be divided among so many options that none will reach a satisfactory market performance. Fortunately, the Kona seems to be the first step towards a change.
The Creta is larger and has a more generic appearance. It was restricted mostly to emergent countries because compact crossovers are usually chosen by small families there. On the other hand, Europeans tend to leave this car category to younger people, usually single or in a couple. As a result, the Kona is smaller and features much sportier lines and a casual touch given by the black-plastic inserts. People of more conservative tastes can opt for the minivans and station wagons Hyundai offers there or the midsize crossover Tucson.
The release of Hyundai’s latest crossover symbolizes the previously mentioned slow deflation of the bubble which surrounds this car category. Automakers can keep releasing new crossovers as much as they want, but they’re automatically forced to further invest in their character, otherwise they’ll fail to stand out. The tendency for the next few years is that the models will have differences big enough to warrant the creation of new niches and, later, full-grown categories. Ironically, the crossover category as we’ve known it is faded to extinction because of its own growth.
