Launches of small SUVs continue to outpace other models in Europe as volume automakers capitalize on demand in a segment that so far hasn’t attracted much interest from premium brands.
Recently added models such as the Ford Puma and redesigned Nissan Juke will be joined next year by the Toyota Yaris Cross and the second-generation Opel/Vauxhall Mokka. The quartet of newcomers will boost the segment to more than 20 models, up from six a decade ago, according to data from market researcher JATO Dynamics.
Small SUV segment to rebound fastest after virus crisis
The leaders
Europe’s top-selling small SUVs in Q1 2020; change from Jan.-March 2019
1. VW T-Roc 40,098 -32%
2. Renault Captur 34,426 -40%
3. VW T-Cross 31,747 new
4. Dacia Duster 28,162 -50%
5. Hyundai Kona 27,223 +1%
6. Opel Crossland X 26,474 -18%
7. Peugeot 2008 25,019 -46%
8. Seat Arona 24,836 -6%
9. Citroen C3 Aircross 21,930 -37%
10. Ford Puma 18,629 new
Source: JATO Dynamics
With more than 2 million sales, small SUVs overtook compact SUVs to become Europe’s third-largest segment overall. Small SUVs also came within 40,000 models of beating compact cars for No. 2 in Europe. The small cars segment remained Europe’s biggest with 2.68 million sales, according JATO Dynamics, but demand fell 5.4 percent as customers migrated to SUV equivalents.
“Small SUVs are slowly replacing the small car as Europe’s most important segment,” JATO Dynamics global analyst Felipe Munoz said. “Automakers can make more money from them than from a regular small hatchback.”
The Volkswagen T-Roc topped the sector for the first three months, which were effected by staggered dealership closures in different countries because of the coronavirus pandemic.
VW’s smaller, newer T-Cross ranked third.
VW’s rise resulted in a fall for Renault Group as the automaker’s namesake Captur was bumped from its usual spot, No. 1, into second place, and the Duster from sibling brand Dacia slipped two slots to No. 4.
At fifth place was the Hyundai Kona, which actually increased sales by 1 percent in the quarter despite the collapse in March sales.
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The popularity of the sector will help it recover faster after the coronavirus-induced sales crash, analyst firm LMC Automotive believes.
Small SUV sales will dip to 1,745,000 this year but return to their 2019 level of more than 2 million next year, then rise to 2.5 million in 2022 and 2.7 million by 2025, LMC predicts. “The forecast for recovery and growth in the sector is noteworthy given our wider European forecast does not recover to 2019 levels until 2023,” Sammy Chan, senior analyst at LMC, said.

The VW T-Roc was Europe's top-selling small SUV in the first quarter, marking the first time Europe's biggest automaker has had the No. 1 model in a segment previously dominated by the French.
The growing size of the sector and its importance to so many automakers has forced them to electrify models or risk missing CO2 targets that took effect this year.
With sales of 5,933 in the quarter the leading full-electric small SUV was the Kona, which Hyundai also offers with hybrid, gasoline and diesel powertrains.
The Kona EV was followed by the battery-powered MG ZS, which managed 2,177 sales, mainly in the UK.
Those models will be getting a lot of competition from PSA Group’s Peugeot, DS and Opel/Vauxhall brands. Prior to the lockdowns that started in March, Peugeot started sales of the e-2008 and the DS3 Crossback E-Tense, one of the few premium models in the sector. Opel has confirmed it will launch an electric version of the new Mokka, which replaces the model that stopped production last year. With the Mokka’s return Opel will once again have two competitors in the sector along with the successful Crossland X.
The share of full-electric cars in the segment will reach nearly 4 percent this year, up from 2.5 percent in the first quarter, LMC Automotive predicts. By 2023 that share will be about 10 percent, before climbing to 17 percent in 2025, according to the analyst firm.
Italian passion
Top markets for small SUV sales in Q1 2020; change from Jan.-March 2019
1. Italy 77,186 -29%
2. Germany 71,982 -17%
3. France 64,443 -36%
4. UK 62,657 -30%
5. Spain 41,502 -30%
Source: JATO Dynamics
Toyota's second foray into the segment, after the Urban Cruiser flopped, will be just the second small SUV to offer a full-hybrid powertrain after the Kona.
The Yaris Cross will use the new-generation Yaris’s hybrid system, which is based around a 1.5-liter three-cylinder gasoline engine and promises CO2 emissions of below 120 grams per kilometer on the WLTP cycle.
Toyota will also offer a variant of the Yaris Cross that has a second motor powering the rear axle to provide all-wheel drive without hurting fuel economy. The automaker believes this feature will make the Yaris Cross stand out against current awd rivals in the segment.
“All the all-wheel-drive systems used thus far will normally compromise fuel efficiency and therefore increase the CO2 emissions,” Yaris Cross chief engineer Yasunori Suezawa said in a videoconference. “But in our car the combination of the hybrid system not only improves fuel efficiency but also provides better performance.”
The market for awd small SUVs is tiny so far, accounting for just 6 percent of sales in the first three months of the year, according to JATO.
Despite Toyota’s and Hyundai’s participation, full hybrids won’t gain much traction in the segment, according to estimates. LMC predicts hybrids will have a 5 percent share of the sector by 2022 and 6 percent by 2025.
Plug-in hybrids are also expected to have a limited presence in the segment because of the high cost of the technology, LMC said. So far, only Renault has announced it will add a plug-in hybrid version of the Captur.

Helped by the arrival of new models such as the Toyota Yaris Cross, small SUV sales are expected to rebound to their pre-coronavirus level by 2021, which is two years faster than any other European segment, according to LMC Automotive.
Rise of electrification
Market share by powertrain type for small SUVs in Europe in Q1 2020
1. Gasoline 72%
2. Diesel 18%
3. Hybrid 3.4%
4. Full-electric 2.5%
5. Plug-in hybrid 0.8%
Source: JATO Dynamics
LMC is more bullish about the future of 48-volt mild hybrids in the segment as it predicts one-quarter of all new small SUVs sold in 2025 will have the technology.
Ford is seeing “extremely high” orders for the mild hybrid version of the new Puma, Ford of Europe President Stuart Rowley told Automotive News Europe in March. “We have gone to market as a hybrid and we are seeing really strong customer demand,” he said.
In some markets, for example the UK, the only version of the Puma currently available is the 1.0-liter mild hybrid gasoline model, although Ford has announced a non-hybrid version of the engine as well as a 1.5-liter diesel.
Premium automakers haven’t given up on the small SUV segment yet, despite taking just 4 percent of the sector with the Audi Q2 and DS3 Crossback. LMC believes BMW will join with the X1 Sport Cross to give premium brands a 7 percent share of the sector by 2025. That still leaves plenty of room for volume brands to sell a product that appeals to customers and generates a strong profit. Said JATO’s Munoz: “They are an essential product for most of the carmakers.”