Table of Contents
Executive Summary
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- What luxury automakers need to know
- Price dictates consumer perception of luxury vehicles
- Consumers follow the same car purchasing timelines
- Where luxury automakers can succeed
- “Unconventional” demographics might prove to be more profitable
- What it means
The Market – What You Need to Know
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- Consumers are losing faith in the US economy
- Gas prices keep climbing following Saudi oil field attacks
- Lexus, BMW and Mercedes-Benz are best performing luxury brands by sales
Market Factors
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- Consumer sentiment falls below 90
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- Figure 1: Consumer Sentiment Index, January 2007-September 2019
- Disposable Personal Income growth is slowing down
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- Figure 2: Disposable Personal Income change from previous period, January 2007-July 2019
- Gas prices expected to climb amid oil field attacks
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- Figure 3: US gasoline and diesel retail prices, January 2007-August 2019
US Vehicle Sales Brand Performance
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- BMW, Mercedes-Benz, and Lexus top luxury brand performance
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- Figure 4: US auto sales by brand performance, 2019 calendar year-to-date
- Luxury vehicle sales have been declining over the past five years
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- Figure 5: US vehicle sales brand ranking by performance, August 2015 -19
Key Players – What You Need to Know
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- Ferrari isn’t keen on going green
- Cadillac takes a swing at Tesla with their Super Cruise technology
- Mercedes-Benz aims to be the front-runner for “sustainable luxury”
What’s Happening?
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- Cadillac bets on their tech for brand revitalization
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- Figure 6: Cadillac Super Cruise, August 2019
- Volvo honored in Fast Company’s 2019 Innovation by Design Awards
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- Figure 7: Volvo E.V.A. Initiative, March 2019
What’s Struggling?
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- Audi comes under fire for E-Tron battery range
- Ferrari fights to keep V-12 engines amid emission restrictions
What’s Next?
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- Mercedes-Benz announces their aim to revolutionize sustainable luxury
- All-electric Jaguar XJ flagship set to release in 2021
The Consumer – What You Need to Know
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- Income level doesn’t change the car purchasing process timeline
- Price, not brand, determines what is considered a “luxury vehicle”
- Just because you can afford it, doesn’t mean you want it: one-third of affluent or HNW consumers have no interest in purchasing a luxury vehicle
- Affluent/HNW consumers most likely to own a Lexus
- Luxury automakers have an opportunity with young female consumers
Luxury Car Ownership
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- Most consumers own more than one vehicle
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- Figure 8: Number of vehicles in household, July 2019
- Lexus, BMW and Mercedes-Benz most owned luxury vehicles
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- Figure 9: Top five luxury brands in the household, May 2019
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- Figure 10: top 15 automotive advertisers, 2019 year to date
- Figure 11: Mercedes-Benz Life is a Race, September 2019
- General market consumers more likely to own a Tesla
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- Figure 12: Household Tesla ownership, by net worth, May 2019
Luxury Car Purchase Consideration
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- Consumer purchase timelines remain the same despite income levels
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- Figure 13: Purchase timeline, by net worth, May 2019
- Most consumers plan to buy “new” vehicles
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- Figure 14: Purchase types considered, July 2019
- More than a third of A/HNW consumers wouldn’t consider purchasing a luxury vehicle
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- Figure 15: Purchase types considered, July 2019
Luxury Brand Attributes
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- Luxury automakers are generically seen as “stylish”
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- Figure 16: Luxury automaker brand attributes, July 2019
- Affluent/high net worth consumers consider Volvo to be the safest luxury vehicle
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- Figure 17: Luxury brand safety perception, by net worth, may 2019
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- Figure 18: Volvo Edmunds Display ad, March 2019
- Figure 19: Volvo top three advertising sites, 2019 year to date
- Luxury brands struggle to be seen as a “good value”
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- Figure 20: Luxury brand good value perception, by net worth, may 2019
- Luxury automakers have an opportunity among young female consumers
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- Figure 21: Stylish luxury automakers, by gender and age, may 2019
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- Figure 22: High performance luxury automakers, by gender, may 2019
Attitudes Toward Luxury Cars
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- Price determines what consumers consider to be a “luxury”
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- Figure 23: Luxury determining factors, may 2019
- While most A/HNW consumers prefer “the finer things”…
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- Figure 24: Luxury car consideration, having nice things, by net worth, may 2019
- …but almost half don’t feel they can afford a luxury vehicle
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- Figure 25: Luxury car affordability, may 2019
- Whereas suburban consumers agree luxury vehicles fit within their budget
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- Figure 26: Luxury car affordability, may 2019
- Young consumers seek luxury vehicles as a way to impress others
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- Figure 27: Luxury car affordability, may 2019
- Parents who say they drive a lot are attracted to luxury vehicles
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- Figure 28: Luxury car affordability, may 2019
Appendix – The Consumer
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- Jaguar primarily popular among middle-aged consumers
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- Figure 29: Lexus brand attribute, by age, May 2019
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- Figure 30: Lexus brand attribute, by gender, May 2019
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- Figure 31: Jaguar, Facebook ad, September 2019
Appendix – Data Sources and Abbreviations
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- Data sources
- Fan chart forecast
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
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