Blog Posts by Marc Bland

Has the Luxury Car Market Lost its Luster?

Luxury Car Share of Light VehicleLuxury car sales in the U.S. for the first quarter 2011 (January through March) are up 8% compared to the same period one year ago. This sounds good but the increase pales in comparison to the overall light vehicle year-over-year increase of 26% for the same period. The result is an approximate 1.5 percentage point reduction of the luxury vehicle market share (decrease from 9.4% to 8.0%).

When I reference the luxury market, this includes the following Polk-defined vehicle segments and their respective top volume models:
  1. Basic Luxury (Nissan Maxima and Infiniti G37 competitors)
  2. Mid Luxury (Cadillac CTS and Mercedes-Benz C-Class competitors)
  3. Prestige Luxury (Mercedes-Benz E-Class and Lexus LS competitors)
  4. Prestige Sporty (Porsche Panamera and Porsche 911 competitors)
  5. Roadster (Mazda MX5 and BMW Z4 competitors)
Luxury Market Share by Segment

The U.S. luxury car market is dominated by the Basic and Mid Luxury segments who collectively represent 82% of the U.S. luxury car market. The Cadillac CTS is the top selling luxury car in the U.S. through the 1st quarter of 2011 with approximately 7% of of the luxury market share.

So why are Americans shying away from luxury car purchases? Could it be one or more of the following:
  1. High cost of luxury cars?
  2. Rising gas prices?
  3. Are Americans still in the grips of post-recession fears and not spending on luxury items?
  4. Could it be the significant improvement in styling and amenities available in non-luxury cars that is slowly eroding the luxury market share?
I don't claim to have all the answers but if if I had to pick only one reason, I'm leaning toward #4 above, based on my personal experience and the recent Detroit News article, "Car Interior Conference Lauds Beauty Within." During Ward's Auto Interiors Conference, 10 vehicles were awarded for best interior. Of the 10 winners, only three were luxury vehicles, including: Audi A8, BMW Z3 and Volvo S60. The other seven vehicles were non-luxury vehicles that offered interiors previously found only in luxury vehicles: Dodge Charger, Chevy Cruze, Honda Odyssey, Hyundai Elantra, Jeep Grand Cherokee, Kia Optima and Ford Focus. Based on this, it appears consumers no longer have to buy a luxury vehicle to "ride in the lap of luxury."

Thus, I will pose a final question to each reader and the industry as a whole as follows:
  • What must the luxury industry do to retain the attention of the current luxury buyer and continue to differentiate itself from the balance of the market?
I'd love to hear your thoughts or general comments on the questions posed and the blog as whole.

Posted by Marc Bland, Product Strategist and Multicultural Marketing Lead, Polk (05.18.2011)

Comments for Has the Luxury Car Market Lost its Luster?

Sunday, June 12, 2011 by max
luxury cars are for people who have lots of money, a person who has a lot of money is not interested in the price and is not affected by fuel prices.

or there are fewer rich people or rich people do that before buying these cars now seen by bank loans or economic uncertainty expect banks will not lend.

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