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Luxury Cars - Canada - December 2016

Luxury automobile manufacturers and brands operating in Canada face a very competitive market with a plethora of models and options for consumers to choose from. A strong interest among consumers in considering a luxury vehicle for their next purchase displays positive signs for the segment.

This report examines the following issues:

  • Affordability is a top concern
  • Rising household debt and dependability on interest rates
  • Some luxury auto brands considered high maintenance

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Table of contents

  1. Overview

    • What you need to know
      • Definitions
      • Executive Summary

        • The issues
          • Affordability is a top concern
            • Figure 1: Most important luxury vehicle attributes (top five), October 2016
          • Rising household debt and dependability on interest rates
            • Some luxury auto brands considered high maintenance
              • Figure 2: Luxury vehicle brand association with high maintenance (top five), October 2016
            • The opportunities
              • Near two thirds would consider a luxury vehicle brand
                • Figure 3: Luxury vehicle consideration, October 2016
              • Men aged 18-44 and Chinese Canadians are biased towards luxury vehicles
                • Figure 4: Attitudes towards luxury vehicles, Chinese Canadians and men 18-44 vs overall, October 2016
              • Opportunities to attract Millennials
                • What it means
                • The Market – What You Need to Know

                  • Aging Canadians and Millennials will help support luxury auto sales
                    • Luxury auto brands will benefit from a growing Chinese population
                      • Economic woes and rising household debt will affect consumer spend
                        • Interest rates and fuel prices remain low
                        • Market Factors

                          • An aging population and Millennials will help boost luxury auto sales
                            • Figure 5: Projected trends in the age structure of the Canadian population, 2014-19
                          • Premium brands will benefit from a growing population that is ethnically diverse
                            • Economic woes and increasing household debt will affect consumer spend
                              • Historically low Interest rates make it easier to jump into a new vehicle
                                • Gasoline prices can manipulate demand for luxury vehicles
                                  • Figure 6: Average retail prices for regular gasoline in Canada
                              • Key Players – What You Need to Know

                                • Seasonal marketing underlines confident winter driving
                                  • Vehicle maintenance related promotions and giveaways
                                    • Dealerships taking service to the next level
                                      • Strong sales in the luxury segment supported by SUVs and crossovers
                                        • Recalls and scandals hurt reputation and bottom line
                                          • Hybrid and electric vehicles have yet to see mass adoption
                                            • Premium auto brands are expanding their range of vehicle offerings
                                            • Marketing and Advertising

                                              • Seasonal marketing stresses confident winter driving
                                                • Figure 7: Acura advertisement, January 2016
                                                • Figure 8: Audi A6 advertisement, November 2016
                                              • Lexus’ “December to Remember” ad campaign for the Christmas season
                                                • Figure 9: Lexus December to Remember commercial, “Santa Letter”, November 2016
                                                • Figure 10: Lexus December to Remember commercial, “Mall Santa”, November 2016
                                                • Figure 11: Lexus December to Remember commercial, “Santa Cam”, November 2016
                                              • Maintenance related promotions and giveaways
                                                • Figure 12: Volvo Canada, acquisition mail, February 2016
                                                • Figure 13: Auto West Infiniti, Richmond, British Columbia, loyalty mailing, February 2016
                                                • Figure 14: Auto West Infiniti, Richmond, British Columbia, loyalty mailing, February 2016
                                              • A luxurious experience through the dealership
                                                • Figure 15: Policaro BMW, Brampton, Ontario, loyalty mailing, March 2016
                                            • What’s Working?

                                              • Strong vehicle sales in the luxury segment
                                                • SUVs and crossovers are in demand
                                                • What’s Struggling?

                                                  • Recalls and scandals hurt reputation and bottom line
                                                    • Hybrid and electric vehicles have yet to see mass adoption
                                                    • What’s Next?

                                                      • Automotive innovations are commonly introduced through luxury vehicles
                                                        • Luxury auto brands are expanding their range of vehicle offerings
                                                        • The Consumer – What You Need to Know

                                                          • Nearly two thirds plan on purchasing a car in the next three years
                                                            • Close to two thirds would consider a luxury brand
                                                              • Older consumers find adjustable comforts important
                                                                • Women are more likely to cite affordability
                                                                  • Younger men and Chinese Canadians are luxury vehicle enthusiasts
                                                                    • Luxury vehicle brand associations vary
                                                                    • Vehicle Purchase Plan

                                                                      • Close to a third plan on purchasing a car within the next year
                                                                        • Figure 16: Vehicle purchase plan, October 2016
                                                                      • Nearly two thirds would consider a luxury brand
                                                                        • Figure 17: Luxury vehicle consideration, October 2016
                                                                    • Passenger and Cargo Features

                                                                      • Warm behinds and spacious trunks are of utmost interest
                                                                        • Figure 18: Importance of passenger and cargo features, October 2016
                                                                      • Older consumers prefer adjustable comforts
                                                                        • Figure 19: Importance of passenger and cargo features, 18-44s vs over-45s, October 2016
                                                                      • Seating space and easy accessibility will draw parents
                                                                        • Figure 20: Importance of passenger and cargo features, parent vs overall population, October 2016
                                                                        • Figure 21: New Tiguan, Volkswagen Australia, September 2016
                                                                    • Most Important Attributes for a Luxury Vehicle

                                                                      • Affordability is important, but so is safety and performance
                                                                        • Figure 22: Important luxury vehicle attributes (any rank top three), October 2016
                                                                      • Affordability is key for women
                                                                        • Figure 23: Most important luxury vehicle attributes (ranked 1st), by gender, October 2016
                                                                      • Preferences change with age
                                                                        • Figure 24: Most important luxury vehicle attributes (ranked 1st), 18-44s vs over-45s, October 2016
                                                                    • Attitudes towards Luxury Vehicles

                                                                      • Younger men and Chinese Canadians are luxury vehicle enthusiasts
                                                                        • Figure 25: Attitudes towards luxury vehicles, Chinese Canadians and men 18-44s vs overall, October 2016
                                                                      • Luxury vehicles are the utmost “treat yourself” purchase
                                                                          • Figure 26: Lincoln Motors, official 2016 Lincoln MKX commercial
                                                                          • Figure 27: All-New Infiniti Q60 millisecond commercial, August 2016
                                                                        • Comfort is essential in a luxury vehicle
                                                                          • Figure 28: Comfort related attitudes towards luxury vehicles, October 2016
                                                                      • Luxury Vehicle Brand Associations

                                                                        • Most associate Mercedes-Benz with luxury
                                                                          • Figure 29: Luxury vehicle brand association with luxurious (top 10), October 2016
                                                                        • Volvo is seen as the leader in safety
                                                                          • Figure 30: Luxury vehicle brand association with safe (top five), October 2016
                                                                        • Tesla is highly regarded as cutting edge
                                                                          • Figure 31: Luxury vehicle brand association wth cutting edge technology (top six), October 2016
                                                                        • Premium vehicles are luxurious and stylish but are also high maintenance
                                                                        • Appendix – Data Sources and Abbreviations

                                                                          • Data sources
                                                                            • Consumer survey data
                                                                              • Consumer qualitative research
                                                                                • Abbreviations and terms
                                                                                  • Abbreviations

                                                                                  Luxury Cars - Canada - December 2016

                                                                                  US $3,995.00 (Excl.Tax)