Luxury Cars - US - October 2017

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
Overview
The issues
Luxury market remains stagnant until 2020
Figure 1: Total US unit sales and fan chart forecast of new luxury cars, 2012-22
Women in the market for cars less likely than men to consider a luxury brand
Figure 2: Luxury intent, by gender, August 2017
Off-lease vehicles give shoppers cheaper alternatives to a new luxury purchase
Figure 3: Method of acquisition, by most recently acquired vehicle, by luxury makes, 2014-17
The opportunities
Hispanic Millennials are a priority target
Figure 4: Purchase intent, by Millennials and Hispanic origin, August 2017
Luxury brands still something shoppers aspire to
Figure 5: Luxury intent, August 2017
Comfort, tech, and style will win luxury car shoppers
Figure 6: Luxury reasons, August 2017
Married urbanites show high luxury intent
Figure 7: Luxury consideration – CHAID – Tree output, August 2017
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Luxury car market remains stagnant through 2019
Luxury SUVs and crossovers continue to see growth
Off-lease CPO vehicles continue to pressure new vehicle sales
High consumer confidence and employment bodes well for luxury
MARKET SIZE AND FORECAST
Forecast predicts stagnant market through 2020
Figure 8: Total US unit sales and fan chart forecast of new luxury cars, 2012-22
Figure 9: Total US unit sales and forecast of new luxury cars, 2012-22
MARKET BREAKDOWN
Luxury segment benefitting from SUV and crossover craze
Figure 10: Total US unit sales of new luxury vehicles, by segment, 2012-16
MARKET PERSPECTIVE
Certified pre-owned and off-lease luxury vehicles pressure new sales
Figure 11: Method of acquisition, by most recently acquired vehicle, by luxury makes, 2014-17
MARKET FACTORS 
High consumer confidence and low unemployment empower car shoppers
Figure 12: Consumer confidence and unemployment, 2000-July 2017
Low gas prices fuel SUV and crossover purchases
Figure 13: US gasoline and diesel retail prices, January 2007-August 2017
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Mercedes-Benz has largest market share in the luxury segment
Lexus’s car lineup struggles through 2017
Luxury brands announce conversion to electric and hybrid drive trains
Tesla’s highly anticipated Model 3 begins mass production
LUXURY CAR SALES BY BRAND
Americans say “Ja!” to German luxury
Figure 14: Market share, by luxury brands, January-August 2017
WHAT’S WORKING?
Mercedes-Benz leads the luxury market
Figure 15: Mercedes-Benz C-Class online display ad, September 2017
Figure 16: Mercedes-Benz #MBLGBT C-Class Cabriolet online display Ad, June 2017
Jaguar F-Pace is a big success story for the British automaker
Figure 17: Jaguar “Impeccable Timing” sales event print advertisement, March 2017
WHAT’S STRUGGLING?
Luxury brands struggle to sell cars
Lexus’ car sales drop by over a fifth of 2016 figures
Figure 18: Lexus “Golden Opportunity” sales event, online display ad, August 2017
BMW’s truck growth unable to overcome car declines
WHAT’S NEXT?
Luxury brands announce electrification plans for model lineup
Tesla depends on a successful Model 3 rollout
Cadillac pilots Book by Cadillac subscription service
THE CONSUMER – WHAT YOU NEED TO KNOW 
Downward trending purchase intent may be reversing
English speaking Hispanic Millennials show high luxury intent
Comfort, tech, and style drive luxury purchase reasons
German luxury brands viewed most positively by consumers
PURCHASE INTENT
Downward trending purchase intent goes into reverse
Figure 19: Purchase intent, July 2016-August 2017
Millennials are the dominant car buying group
Figure 20: Purchase intent, by generation, August 2017
English-speaking Hispanic Millennials show high purchase intent
Figure 21: Purchase intent, by Millennials and Hispanic origin, August 2017
Major life events correlate with high purchase intent
Figure 22: Purchase intent, by major life events, August 2017
LUXURY INTENT
Nearly two in five aspire for a luxury brand
Figure 23: Luxury intent, August 2017
Millennials a key target for luxury
Figure 24: Luxury intent, by generation, August 2017
Figure 25: Luxury intent, by generation and Hispanic origin, August 2017
Men show higher desire for luxury badge than women
Figure 26: Luxury intent, by gender, August 2017
Married city dwellers likely to buy a luxury brand
Figure 27: Luxury consideration – CHAID – Tree output, August 2017
Figure 28: Infiniti QX30 – Carpool, March 2017
Figure 29: 2017 Audi A4: Driver Assistance Systems, March 2016
LUXURY REASONS
Comfort, tech and style drive reasons for buying luxury
Figure 30: Luxury reasons, August 2017
Millennials value what’s under the hood as much as the badge on top
Figure 31: Luxury reasons, by Millennials, August 2017
LUXURY BRAND PERCEPTIONS
German luxury brands top consumer perceptions
Figure 32: Luxury brand perceptions, August 2017
Blacks view Cadillac favorably in critical factors
Figure 33: Luxury brand perceptions, by luxury car shoppers, August 2017
Tesla electrifies hybrid and EV shoppers
Figure 34: Luxury brand perceptions – Tesla, by hybrid/EV shoppers, August 2017
ATTITUDES TOWARD CAR OWNERSHIP
Personal car ownership isn’t ending anytime soon
Figure 35: Attitudes toward car ownership, August 2017
Luxury car shoppers even more attached to their vehicles
Figure 36: Attitudes toward car ownership, by luxury intent, August 2017
Leasing an attractive option for Hispanic Millennials
Figure 37: Attitudes toward car owners, by Hispanic origin and generation, August 2017
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms
APPENDIX – KEY PLAYERS 
Figure 38: Units sold and market share, by brand, January-August 2017
Figure 39: Units sold and market share, by brand, 2016