Luxury Market

New Luxury Products Conquest Non-Luxury Owners

One of the most competitive parts of the U.S. new vehicle market is the lower end of the luxury space, where the Mercedes-Benz CLA-Class, Audi A3 sedan and BMW 320 all serve as gateways, at least on the car side, from the non-luxury makes up to the prestige brands. An IHS Automotive analysis of Polk new vehicle registration data indicates that the CLA-Class and A3 sedan are both succeeding in this effort as both appear on the list of models most likely to conquest non-luxury drivers. But they...R...
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Ford Fusion Moves up in the Midsize Car Segment, Despite the Asian Stronghold

The domestic OEMs have lagged behind their Asian competitors in the U.S. new car market for many years. From 2009 through 2012 the domestic OEMs’ combined share of the retail car market was below 28%. Last year it inched up to 28.2%, and through the first four months of 2014 it stands at 28.7% (based on IHS Automotive analysis of Polk new vehicle registration data). Although the current car offerings from GM, Ford and Chrysler are clearly superior to their predecessors in many perspectives,...
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Luxury Automotive Leadership Now a Three-Way Contest

There is a scene in the movie, “The Right Stuff” (about the Project Mercury program in the early 1960s to send an American into space) in which the astronaut candidates are undergoing endurance testing. One of the tests involves blowing into a tube for as long as possible with just one breath. The camera zeroes in on two of the participants, the presumed front-runners, who are frantically competing with one another, watching each other every second and seemingly about to burst at the seams to...R...
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Jeep Off to Extraordinary Start in 2014

As the automotive world focuses on the GM recall crisis, other stories are getting less visibility than they otherwise would. One of these is Jeep and its amazing start to 2014. Consider the following:
  • In the first three months of 2014, Jeep dealers delivered 145,839 new trucks, almost 45,000 (45%) more than a year ago, the largest increase of any brand in the industry (other than the 331% increase at low-volume Maserati).
  • Jeep captured 3.9% of the U.S. market in the first quarter, up 1.2...
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Small Crossover Sales Explode in February

February U.S. car sales were driven in part by the appeal of mainstream compact crossovers. These vehicles offer the ideal combination of value for the money, good fuel economy, car-like driving characteristics, and SUV-like functionality. Midsize as well as sub-compact crossovers offer some of these advantages but not all of them. Compact crossover sales in February drove industry results at the segment, model and make levels. At the segment level, the February results were extraordinary.... Rea...
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Are Brands Important?

In “Twilight of the Brands” in the February 17/24 issue of “The New Yorker,” James Surowiecki  discusses the challenges facing brands in today’s information-rich U.S. economy. Surowiecki focuses on Lululemon Athletica, a yoga apparel company that quickly became the darling of the industry and then tumbled almost overnight because of negative customer feedback. Such instantaneous customer reaction can propel a company to new heights or spell its doom in the blink of an eye, according to...Read...
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Who is Buying the Tesla Model S?

Given all the attention recently focused on Tesla, I thought it would be interesting to see who is buying the Model S. Specifically, what are customers trading in for the Model S, or what other vehicles do Model S buyers have in their garage if they are adding to their fleet? The Model S conquest data, derived from Polk new vehicle registration data, are fascinating. There are two ways of looking at the data. First, the pure conquest data show that the Model S is conquesting owners of... Read...
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When Porsche Outsells Other German Luxury Brands in Brazil

Do you think a Jeep Grand Cherokee is a direct competitor of a Porsche Cayenne? Would you add the Volkswagen Touareg to the competitive set? Well, many Brazilian consumers do. And the results may be surprising. Let me start with the winner in the SUV/crossover segment. Land Rover is the preferred brand. The Range Rover Evoque sells over three times more than vehicle number two, the Volvo XC60. And the Freelander (LR2 in the U.S.) comes right in third place. Looking one length class above, the......
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Luxury Share of U.S. Auto Market Remains in 10-11% Range

The competition in the luxury part of the U.S. new vehicle industry has perhaps never been as intense as it is right now, and, in a related trend, new product activity in this space is as frenetic as ever. BMW, Lexus and Mercedes-Benz continue to vie for luxury sales leadership with Audi and Cadillac aggressively trying to move up. Many of the luxury makes have been expanding into new segments, with such products as the Evoque, F-Type and CLA. There are other examples of this trend coming...
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Porsche Macan: “De-Nichification” Continues

The Porsche Macan, Porsche's all-new small crossover revealed last week in Los Angeles and to be launched in the U.S. next spring, should be a "slam dunk," given the landscape of today's new vehicle market. The small luxury crossover segment is one of the fastest-growing in the industry, with registrations more than quadrupling since 2008 and share of industry up by almost the same amount (see table below). The number of small luxury crossovers in the market has doubled from four in 2008 to...
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Mercedes-Benz CLA Has a Strong Start

Monthly summaries of U.S. car and light truck sales focus on macro results such as the seasonally adjusted annual rate (SAAR), corporate results and brand results. Micro outcomes get less publicity even though they may be as noteworthy, if not more so. For instance, there has been little mention given to the fact that Mercedes-Benz dealers delivered 4,895 CLAs in October, its second month on the market. This tally follows 2,310 sales in September. The October figure is surprisingly strong and...R...
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Let's Kick off Auto Show Season!

I attended the 43rd edition of the Miami International Auto Show at the Miami Beach Convention Center. This is truly regarded as the official kick off for auto show season. Miami's show is sponsored by the South Florida Automotive Dealers Association, which boasts over 175 dealers. My experience began with a media launch party on November 7th at the well-appointed Raleigh hotel on Collins Avenue. This event boasted many local dealers, product specialists, show event planners, members of the...
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Smaller Powertrains Drive Jaguar Forward

After two lackluster years, Jaguar is now thriving in the U.S. In both 2011 and 2012, Jaguar suffered registration declines even though the industry recorded double-digit growth. But this year, Jaguar's registrations have jumped 25% through August when compared to a year ago. This is the fourth highest year-over-year gain among all makes (with 1,000 or more registrations) that were also on the market for all of 2012, after Porsche, Cadillac and Subaru. Jaguar's gain is almost three times the...Re...
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Will Automotive Luxury Brands Succeed in Brazil?

Do you have the impression that the Brazilian president meets the CEO of an automaker daily? Lately there have been a lot of announcements that OEMs will start – or resume – production in Brazil. This year, Honda and Mercedes-Benz announced new plants, while Audi stated it is coming back to Brazil and making cars in a VW plant where it built the A3 some years ago. VW confirmed it is finally updating the locally made Golf (currently still in its fourth generation). Last year, BMW announced its......
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Automotive Leasing Moves Beyond the Luxury Market

Leasing is not just back; it has climbed to new heights in the U.S. car business. Through the first seven months of 2013, leases have accounted for 20% of all new vehicle transactions, the highest annual lease penetration in at least 10 years if it holds for the rest of the year. The Fed's bond-buying program, which has suppressed interest rates, coupled with the higher quality and residuals of new vehicles, has helped to make leasing more attractive to the consumer. This industry-wide rise...
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August 2013: A Terrific Automotive Sales Month, Particularly for the Japanese

August U.S. new car and light truck sales were not merely good — they were extraordinary. Consider the following:
  • U.S. customers purchased 1,503,151 new cars and light trucks in August, the highest monthly volume since May 2007
  • This August total converts to an annual rate (SAAR) of 16.1 million, the highest monthly SAAR since November 2007
  • The August year-over-year increase of 17% was the highest monthly change since June 2012
  • Every manufacturer enjoyed a sales increase in August
  • August Ford...
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There are 33 New Vehicle Segments in the U.S. Market, But...

Drive on any U.S. highway for more than 10 minutes and you can't help but notice the wide variety of vehicles on the road. There appear to be dozens of colors, wheels, designs and body types from which to choose, not to mention the variety of less visible features such as engines, transmissions and connectivity technologies. A visitor to the U.S. could rightfully be overwhelmed by the plethora of different cars and light trucks on the road. Yet, a review of body type registration data reveals......
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Domestic Automakers Gain Car Share

There is mounting evidence that the three "domestic" automakers, long known for their strength in light trucks, are turning out more competitive cars and that consumers are noticing. New retail registration data for the first five months of 2013 show the domestics have gained almost two points of car market share (versus the same time period in 2012) with almost all of this increase coming at the expense of the Asian makes. The domestics have made these gains while at the same time increasing...R...
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Is there any Logic to Argentina's Auto Market?

If you follow my posts, you have read that there is not much logic in Brazil's automotive market (if not, you can follow the link at the bottom of the blog). Today, I will show that neighboring Argentina faces the same problem. Argentina is struggling with inflation. Last year, inflation was 10% according to the government, but opposition in Congress says it was 25% – the highest rate in South America and only behind Venezuela. The government is known for reporting lower inflation and higher...
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Premium “Sweet Spot” - Small Crossovers

The "sweet spot" in the U.S. premium new vehicle market right now, at least from a volume standpoint, is the compact crossover category. Small luxury CUV registrations have jumped almost four-fold over the past five years, with almost 75,000 being delivered in the first five months of 2013. The segment's share of industry has reached 1.15% and small luxury crossovers now account for more than one of every 10 luxury registrations (with all luxury crossovers together making up a third of the...Read...
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