Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- Overview
- The issues
- Tariffs threaten to increase costs across the board
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- Figure 1: Total US sales and fan chart forecast of luxury vehicles, 2013-23
- Cost continues to price out many enthusiastic shoppers
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- Figure 2: Luxury car shoppers, by household income, August 2018
- Half of consumers think luxury cars are self-indulgent and high maintenance
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- Figure 3: Attitudes toward luxury cars, August 2018
- The opportunities
- Luxury shoppers show more immediate intent
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- Figure 4: Purchase intent, by intent to purchase luxury, August 2018
- Urban Millennials will drive luxury vehicle sales
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- Figure 5: Intent to purchase luxury, by generation, August 2018
- Luxury shoppers willing to pay more for comfort, convenience, and tech
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- Figure 6: Desired features, by intent to buy luxury, August 2018
- What it means
The Market – What You Need to Know
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- Growth forecasted for the luxury market, depending on trade disputes
- Tariffs could stunt growing luxury segment
- Luxury share of the overall market continues to grow
Market Size and Forecast
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- Trade wars forecasted to impact short term sales
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- Figure 7: Total US sales and fan chart forecast of luxury vehicles, 2013-23
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- Figure 8: Total US sales and forecast of market, at current prices, 2013-23
Market Breakdown
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- Luxury market share grows to 14.4% in strong economy
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- Figure 9: Market share of luxury vehicles, 2014-18
- SUVs and crossovers even more popular in luxury
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- Figure 10: Total US unit sales of luxury vehicles, by segment, 2013-18
- Figure 11: Luxury SUVS and crossover market share, 2013-18
- Luxury brands overrepresented in plug-ins and battery electric vehicles
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- Figure 12: Luxury brand market penetration as a percentage of total sales, by powertrain, 2017
Market Perspective
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- Mobility services continue to expand among urban consumers
Market Factors
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- Tariffs inject fear and uncertainty in auto market
- Economic indicators point to healthy economic growth
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- Figure 13: Consumer confidence and unemployment, 2000-August 2018
- Rising interest rates increase costs for shoppers
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- Figure 14: Effective federal funds rate, Sept 2013-Sept 2018
Key Players – What You Need to Know
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- Mercedes-Benz led luxury market in 2017 with 14% market share
- Jaguar brings two crossover models to market, with another on the way
- Tesla ramps up Model 3 production to 5K
- Besides the Navigator, Lincoln struggles continue in 2018
- Lexus leads brands in SUV/crossover category
Brand Sales of Luxury Vehicles
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- Mercedes-Benz leads luxury market for 2017
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- Figure 15: Luxury sales by brand, 2017
- Cheaper sports cars account for the bulk of sports/super car sales
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- Figure 16: Sales of specialty/sport luxury cars, by brand, 2017
- German luxury brands dominate the luxury car segment
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- Figure 17: Sales of luxury cars, by brand, 2017
- Lexus leads SUVs and crossovers in 2017
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- Figure 18: Lexus mobile ad, September 2018
- Figure 19: Sales of luxury SUVs and crossovers, by brand, 2017
What’s Working?
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- Revamped Lincoln Navigator sales nearly double year-over-year
- Crossovers across multiple brands gain double-digit growth rates
- Tesla rockets past expectations in Q3 2018
What’s Struggling?
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- Lincoln crossovers struggle while category thrives
- Passenger cars continue precipitous decline
What’s Next?
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- Additional crossover and SUV models roll onto dealership lots
- BMW X7
- Lincoln shifts away from MK nomenclature with the Lincoln Nautilus
- Jaguar E-Pace & I-Pace
- Automation in luxury will warm consumer perceptions of the technology
The Consumer – What You Need to Know
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- High-earning urban Millennials prime luxury audience
- Luxury shoppers show more immediate purchase intent
- Maintaining a lifestyle is the main reason for buying luxury
- Luxury shoppers will pay more for tech in their vehicles
Purchase Intent
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- Purchase intent shows slight increase
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- Figure 20: Purchase intent, August 2018
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- Figure 21: Purchase intent, July 2016-August 2018
- High-income consumers show lower purchase intent
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- Figure 22: Purchase intent, by household income, August 2018
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- Figure 23: Vehicles in the household, by household income, August 2018
- Major life events turn consumers to car shopping
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- Figure 24: Purchase intent, by major life events, August 2018
Luxury Intent
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- Luxury consideration outpaces actual luxury vehicle sales
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- Figure 25: Intent to purchase luxury, August 2018
- $75K+ show highest consideration for luxury purchase
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- Figure 26: Intent to purchase luxury, by household income, August 2018
- Figure 27: Luxury car shoppers, by household income, August 2018
- High-earning urban Millennials prime audience for luxury brands
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- Figure 28: Intent to purchase luxury, by generation, August 2018
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- Figure 29: Intent to purchase luxury, by area, August 2018
- Figure 30: Profile of luxury car shoppers, August 2018
Luxury Shoppers in the Market
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- More immediate intent among luxury shoppers
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- Figure 31: Purchase intent, by intent to purchase luxury, August 2018
- Luxury shoppers more likely to consider new
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- Figure 32: Purchase type, by intent to purchase luxury, August 2018
- Leasing higher among luxury shoppers
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- Figure 33: Payment type, by luxury consideration, August 2018
- Vehicle type consideration shows little variation among luxury shoppers
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- Figure 34: Vehicle types, by luxury consideration, August 2018
- Luxury shoppers will be more independent in decision
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- Figure 35: Purchase responsibility, by luxury consideration and gender, August 2018
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- Figure 36: Marital status, by intent to buy luxury and gender, August 2018
- Figure 37: Parental status, by intent to buy luxury and gender, August 2018
- Luxury cars just as likely to drive children in family households
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- Figure 38: Driving responsibility, by intent to buy luxury, August 2018
Reasons for Buying Luxury
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- Luxury cars are a lifestyle purchase for many shoppers
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- Figure 39: Reasons for buying luxury, August 2018
- Improving the driving experience will best resonate with coveted Millennials
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- Figure 40: Reasons for buying luxury, by generation, August 2018
- Motivations for buying a luxury vehicle split on gender
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- Figure 41: Reasons for buying luxury, by gender, August 2018
Desired Features
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- Luxury shoppers would pay more for comfort, tech, and convenience
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- Figure 42: Desired features, by luxury consideration, August 2018
- Millennials stand out among comfort, cargo, and passenger space
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- Figure 43: Desired features, by generation, August 2018
Luxury Brand Perceptions
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- German luxury brands lead consumer perceptions in multiple categories
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- Figure 44: Luxury brand perceptions, August 2018
- Tesla shows improvement in tech perception and outperforms among youngest consumers
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- Figure 45: Luxury brand perception of tesla, by generation, August 2018
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- Figure 46: Tesla brand perception, August 2017-August 2018
- Affordability perceptions can make up deficiencies among shoppers
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- Figure 47: Brand perceptions, by intent to purchase luxury, August 2018
- Black consumers view traditional American luxury more favorably
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- Figure 48: Luxury brand perceptions, by race, August 2018
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- Figure 49: Luxury brand perceptions, by race, August 2018
Attitudes toward Luxury Cars
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- Nearly half of consumers find luxury vehicles a self-indulgent purchase
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- Figure 50: Attitudes toward luxury cars, August 2018
- Views on luxury vehicles sour with age
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- Figure 51: Attitudes toward luxury vehicles, by age, August 2018
- In-market shoppers have more positive views of luxury cars
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- Figure 52: Attitudes toward luxury cars, by intent to buy luxury, August 2018
- Beauty and branding stand out among women luxury shoppers
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- Figure 53: Attitudes toward luxury cars, by intent to buy luxury and gender, August 2018
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Consumer qualitative research
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
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