Toyota RAV4 sales rose a whopping 31% in October, helping Toyota to its best-ever month for U.S. sales. Image source: Toyota
What: Toyota and Honda haven't been left behind by Americans' growing preference for SUVs. Both posted good sales gains in the U.S. for October, led by big demand for their trucks and crossover SUVs.
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A best-ever month for Toyota Toyota said on Tuesday that its U.S. sales rose 13% in October to 204,045 vehicles, its best-ever monthly result for U.S. sales.
Not surprisingly given industry trends, the big stories for Toyota were its crossover SUVs. While Toyota's Detroit rivals have traditionally dominated the SUV segments, the Japanese giant has made very good inroads with its wildly popular compact RAV4 and midsize Highlander offerings. Highlander sales rose 10% while the RAV4 posted a 31% gain. Both were the models' best-ever results in October. Their upscale siblings also had a good month: Sales of Lexus SUVs were up a combined 34% in October.
GM's new midsize pickups have shined, but Toyota's Tacoma is also posting strong sales gains. Image source: Toyota
Toyota's midsize pickup, the Tacoma, has long been the class leader. It's facing stiff competition from new entries from General Motors, the Chevrolet Colorado, and GMC Canyon. Toyota has responded with an updated version of the Tacoma for 2016. Sales were very good in October, up 17% year over year.
Toyota's fuel-efficient offerings have suffered in comparison to its SUVs this year, not surprising given the trend in gas prices over the last 12 months. But after months of poor showings, its Prius hybrid line managed a 12.5% gain in October.
Some credit for the Prius's success may be due to rival Volkswagen . Volkswagen's diesels were heavily marketed as "green," fuel-efficient alternatives to gasoline-powered sedans -- and to hybrids. With sales of VW's diesels suspended in the U.S. amid a growing scandal, Toyota has had an opportunity to make inroads with VW's diesel loyalists. And with an all-new 2016 Prius set to arrive soon, good deals have been available on the 2015 models.
Big gains for Honda's SUVs, tooMeanwhile, rival Honda also managed a good month, posting a 9.3% gain for its best-ever October in the U.S., again on brisk sales of crossover SUVs.
Honda's compact CR-V is a direct (and fierce) rival to Toyota's RAV4. Sales of just over 29,000 were about the same as its (very strong) year ago result, but that may be a function of supply rather than demand. Demand has been brisk recently: The CR-V had its best-ever month in August, and a very strong September. It's possible that Honda's assembly line is maxed out, at least for the moment.
It's also possible that the assembly line is prioritizing production of the CR-V's upscale sibling, the Acura RDX. Honda gave the RDX a facelift for 2016. Those models began arriving at dealers in the spring, and buyers have liked what they've been seeing: RDX sales jumped over 22% in October.
The all-new 2016 Honda Pilot SUV began arriving at U.S. dealers in June. Sales have been strong. Image source: Honda
The bigger Honda Pilot, on the other hand, posted an exceptional 63% year-over-year gain, with almost 13,000 sold. The all-new-for-2016 Pilot began arriving at dealers in June. It's lighter in weight than its predecessor and loaded with new safety features, and reviewers have been impressed with its ride and handling.
The upshot: Japan is keeping up with Detroit in a truck-heavy market America (and other parts of the world) are in the midst of a boom in sales of SUVs. But unlike the SUV boom we saw last decade, which was driven by heavy truck-based models, the popular models this time around are "crossovers," based on architectures shared with cars.
For buyers, the advantages are obvious: The latest generation of crossovers combine SUV features like roominess, an upright driving position, and (to some extent) all-weather ability with car-like handling and fuel economy.
As we saw last decade, the Detroit automakers have done well with these new-generation crossover SUVs. But unlike last decade, this is a game that the Japanese automakers are also playing well. Models like the Highlander and CR-V compete very well with their Detroit-brand counterparts. They have helped Toyota and Honda, traditionally very dependent on sedan sales, keep pace in a market that can't seem to get enough trucks.
The article How Toyota and Honda are Riding the SUV Surge originally appeared on Fool.com.
John Rosevear owns shares of -- and The Motley Fool recommends -- General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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