FOR his daughter's first birthday, Eric Yang, 30, an employee at a foreign advertising company in Shanghai, bought something more grandiose than a conventional toy. He purchased a new sport utility vehicle.

Well, it may be some time before his new offspring will be behind the wheel, but the new vehicle is aimed at making it easy to tote a bigger family and paraphernalia like a baby stroller around.

"The reason why I choose an SUV is because of its striking look and its spacious interior," Yang explained. "That will help us carry everything we need."

It's a step up for Yang, who bought a Peugeot 206 subcompact sedan four years ago when he got married and needed an entry-level car for the daily commute to work and romantic outings with his wife.

Yang's new Kia Sportage sport utility vehicle cost 200,000 yuan (US$31,500), nearly triple the price he paid for the old Peugeot.

"The higher vision when you get sitting in the vehicle is also very important for driving in crowded cities like Shanghai because you can always see what's happening in front of you," he said of his new purchase.

When he went looking for a vehicle to accommodate his expanded family, Yang considered the Hyundai ix35 and the Honda CR-V. He settled on the Kia model because it came with a one-year interest-free loan.

"I didn't need to use up my entire purchase budget right away," he said. "That swayed it for me."

Still, driving the new Kia Sportage, which has a 2.0-liter engine capacity, has increased Yang's operating costs 50 percent to 300 yuan a week.

"The additional cost doesn't worry us much," said Yang, "Compared with all the conveniences of the SUV, it's still well worth it."

Safer and trendier

Yang's point of view isn't all that uncommon in China.

Despite less fuel economy, tighter parking requirements, rising fuel costs and higher purchase prices, the gas-guzzling SUV is enjoying a heyday in China, even as overall auto industry sales slow. During the first 11 months of this year, sales of off-road vehicles increased 18 percent from a year earlier to 1.42 million units. That compared with 3 percent growth in the overall vehicle market and 5 percent growth in passenger car sales.

SUVs are expected to account for 13.4 percent of sales this year, more than double their market share in 2003.

It has taken years for SUV models – so popular in developed countries – to catch on with the sedan-enamored Chinese consumers.

Since 2005, the market for city SUVs, normally equipped with engine capacity of between 2.0 and 2.5 liters, has been growing steadily, starting off with the popular Honda CR-V. The latest wrinkle in the market is the compact SUV.

"Female customers are attracted to the SUV because of the advantage of sitting slightly higher than in a sedan, which gives them a better overview of the traffic situation," said Zhong Shi, an independent analyst.

"The perception of SUVs being safer and trendier is enhanced by the feeling of better driving control," he added.

According to a survey by Sinotrust, the SUV is the most popular vehicle in China this year, replacing the time-honored sedan among first-time buyers.

Sinotrust says the average life cycle for a car in China is three to five years, meaning the SUV could benefit during the third wave of the first car-buying boom that started in 2003-04.

The increasing purchasing power of Chinese consumers and more diversified market demand also bode well for SUVs, the company said.

"The SUV market in China is still fast growing, with huge potential," Lin Lei, president of Sinotrust told reporters at a forum. "As consumers become more mature and demand for individuality rises, sales growth in the SUV segment should continue to exceed the industry-wide average in the next three to five years."

Status symbol

Though Honda's CR-V continued to lead the segment with nearly 18,000 units sold in October, the SUV market is no longer dominated by one single model. Sales of Nissan's Qashqai, Volkswagen's Tiguan, Toyota's RAV4 and Hyundai's ix35 models all surpassed 10,000 a month.

The eight best-selling models, including the CR-V, RAV4 and Tiguan, comprised 80 percent of the SUV market last year, with prices ranging between 150,000 yuan to 300,000 yuan, according to Sinotrust.

The boom is not the exclusive domain of foreign automakers. Domestic brands are also carving out market share but maintream products including Great Wall's Hover and Chery's Tiggo are priced more modestly at between 80,000 yuan and 150,000 yuan.

The SUV craze seems at variance with the Chinese government's push for fuel-efficient, smaller vehicles. Analysts said they don't think that will dent sales much.

Jochen Siebert, chairman of JSC (Shanghai) Automotive Consulting Co, said the differences in terms of drivability and fuel consumption for modern SUVs like the VW Tiguan and Hyundai ix35, compared with sedans, aren't all that great anymore.

"Higher fuel consumption mainly occurs at speeds above 130 km, where drag becomes the deciding factor," said Siebert.

Those aren't the speeds of city driving, he noted. Based on the cars and engines compared in the study, fuel consumption was about 1 liter more per 100 kilometers, on average, he said.

"Consumers buying SUVs are usually well-off," Siebert added. "For them, the higher cost of the car, the fuel and the taxes are not really a deciding factor. Part of the attraction of the SUV is the prestige as a status symbol. That won't end anytime soon."

However, other analysts worried that the third stage of fuel consumption limits, starting January 2012, would possibily delay the launch of some new SUV models, especially locally branded ones because their power train and body lightweighting technology may not be able to make their SUVs meet the new requirement.

Carmakers have pinned high hopes on the SUV segment, with plans to roll out more models and increase production.

Shanghai Volkswagen unveiled an updated version of the Tiguan at the Guangzhou auto show in November. Thomas Zahn, executive director of the Volkswagen brand at Shanghai Volkswagen, said at the time he expected demand for mid-size SUVs to continue through next year.

Guangzhou Auto plans to launch its first SUV model, the GS5, next year. The Fiat Freemont and a new generation of Honda CR-V are also expected to enter the market.