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Crossover rollouts continue with Porsche, Ford concept at LA show

Car emblems for the new Porsche 918-Spyder are placed in a box at the production line of the German car manufacturer's plant in Stuttgart-Zu
Car emblems for the new Porsche 918-Spyder are placed in a box at the production line of the German car manufacturer's plant in Stuttgart-Zu

By Ben Klayman

LOS ANGELES (Reuters) - Consumers' growing love affair with "crossover" vehicles that combine the functionality and cachet of sport utility vehicles with the comfort and performance of a car shows no signs of abating with Germany's Porsche unveiling the compact luxury Macan.

Porsche is just the latest in the global automotive industry to pile on more crossovers as it showed off its fifth model, including its second crossover, at the Los Angeles Auto Show on Tuesday night.

Meanwhile, Ford Motor Co , which has numerous sport utility and crossover models in its lineup, was scheduled to introduce a design concept of its Edge on Wednesday that hints at the look of future versions of that mid-sized crossover.

"This is not a specialty product anymore. This is a core, mainstream body style," Ford's global marketing chief, Jim Farley, said of crossovers like the Edge concept.

Crossovers' advantages include their prestige imagery, the functionality of the interior and the ability of drivers to sit above the traffic and have a commanding view of the road, he said.

The SUV craze really started with the Jeep Cherokee in the mid-1980s and then accelerated when Ford introduced the Explorer in the early 1990s. But the car-based Lexus RX300, introduced in the U.S. market in 1998, took the industry in a new direction, Kelley Blue Book senior analyst Karl Brauer said.

With a smoother ride, more amenities and better fuel mileage than truck-based SUVs, the new crossovers eventually overtook even minivans and wagons as the family vehicle of choice, he said.

Crossover sales in the United States have risen from just over 2 million vehicles in 2008 to an estimated 3.9 million this year, according to research firm LMC Automotive. And with almost 70 new or redesigned models debuting in the next four years, that number should top 4.2 million sales in 2017.

The industry is seeing the continued refinement of the segment and the push deeper into premium, analysts said.

Land Rover introduced its Evoque and Jaguar announced its intention to enter the game with its C-X17. Both brands are owned by India's Tata Motors . And companies already there like BMW AG , Daimler AG's Mercedes and Volkswagen AG's Audi brand are expanding their crossover lineups.

"We have evolved into a society that loves our utilitarian vehicles, but we want them as car-like as possible," Brauer said. "These crossovers, be they mid-sized or smaller, be they volume or premium, are just continuing to sell better and better.

"If you build some kind of an SUV crossover-sized vehicle that rides and looks remotely well, mid-sized or smaller, you will sell a lot," he added.

Porsche's entire product mix and revenue stream changed with the introduction of the Cayenne in 2002 and the smaller 2015-model Macan will only extend that trend, Brauer said. Porsche officials said the addition of the Macan means the sports car company will eventually derive more than half its sales from crossovers.

LMC analyst Jeff Schuster said the big growth area for crossover vehicles now is the compact premium segment where the Macan will play when it debuts in the spring with a starting price of almost $51,000. Everywhere else, there will be a leveling off as competition heats up with so many introductions and redesigns.

Porsche executives said they will start with an annual manufacturing capacity for the Macan of 50,000 vehicles to serve its global markets. Bernhard Maier, Porsche's board member in charge of sales and marketing, said the car is aimed at the brand's urban, young consumers.

Mainstream brands are enjoying the ride as well as Brauer said Ford cannot build enough SUVs and crossovers as sales of the Escape, Explorer, Flex and Edge continue to rise. "The lesson seems to be there's no such thing as too many SUVs in your lineup."

The No.2 U.S. automaker is aiming to turn the Edge into a global vehicle just like it has the EcoSport and Escape/Kuga SUVs with the biggest opportunity to pick up sales in China, the world's largest auto market, Farley said. The company has said it also plans to sell the new Edge in Europe.

Even in Europe, where sales have slumped, demand is growing for utility vehicles and Ford officials said Edge sales in the U.S. market will set a new high this year with more than half its buyers being new to the Ford brand.

The Edge was introduced in 2006 and remodeled four years later, and while Ford has not said when a next version will debut analysts expect it early 2015.

(Reporting by Ben Klayman in Los Angeles; Editing by Matt Driskill)

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