A Toyota sales exec in the USA believes that the demand for compact SUVs will beat D-segment sedans in the years to come, Bloomberg reports. Bob Carter, Toyota Motor Corporation’s top sales executive foresees that the Toyota RAV4 will outdo the Toyota Camry in terms of sales in the next five years, with millennials being the majority of buyers.

“I’ll bet you lunch that will happen,” the exec asserted. Carter noted that many of those under the age of 35, entering the market “in a big way,” spent their lives growing up with an SUV. The exec admitted that five years ago, he never thought that one day, compact SUVs would outsell sedans. “There’s a really dramatic shift in consumer preference going on,” he said.

According to Carter, millennials and baby boomers are shifting to compact SUVs as they are economical, affordable and not harsh in terms of ride seeing that it shares the same underpinnings as compact cars. “Compact SUVs, have the comfort of mid-sized sedans, they’ve got competitive fuel economy, they’ve got all the amenities and the price is almost the same.”


He stated that compact SUVs such as the Toyota RAV4, Honda CR-V and Ford Kuga sell better than sedans like the Toyota Camry and Honda Accord. Toyota will sell 300,000 RAV4 models and some 425,000 Camrys in the US this year, he added. Last month, sales of the RAV4 in the US shot up to 30%, while the Camry rose by only 7.3%, however, total sales of the Camry is down by 1.2% for the year.

To cater to the great demand of the RAV4, Toyota will also be importing the model directly from Japan. In addition to that, the brand will be setting up a second plant in Canada, where it will be able to produce over 400,000 RAV4 models a year in North America, Carter disclosed.

While Toyota believes that the compact SUV will trump the sedan, its partner, Mazda, doesn’t quite feel the same way. Masamichi Kogai, Mazda’s global CEO says that although the SUV segment is continually growing, focusing on a sedan will allow it to create “great driving cars,” which in turn will play a role in the dynamics of its SUVs.