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Luxury Cars - US - October 2014

 

“Luxury car sales have been strong, but seasoned marketers know that any brand is only as good as its next sale. Marketers have an opportunity to sustain the next generation of luxury buyers with impressive ongoing service, next-gen technology, and the possibility of a more comfortable car buying process.”– Ali Lipson, Category Manager – Retail & Apparel, Technology, Automotive

This report looks at the following questions:

  • What is next for entry-level luxury buyers?
  • What “next-gen” technology resonates with luxury car buyers?
  • Should luxury dealerships embrace a “no-pressure” environment? 

The luxury car market is more than a niche segment of the auto industry: 2014 sales are expected to top 2.5 million units and account for 15.5% of all vehicles sold. Luxury vehicle sales are growing faster than the overall market and this segment represents significant growth opportunities. Luxury buyers are particular in their tastes and opinions. They desire specific features and want a car buying experience that is catered to these needs.

Readers of this report will gain an in-depth understanding of the luxury vehicle market and the consumers it serves. Topics include:

  • Sales, market share, and marketing activity of the leading automakers.
  • The luxury car consumer: who expects to purchase a new car and when. What types of features and services is the luxury car intender looking for when making a purchasing decision?
  • How are consumers reacting to the newest technology, entertainment, and safety features? What brands are innovating in these categories and how are they doing it?

For the purposes of this report, Mintel has used the following definitions:

  • This report covers the sale of new domestic and imported luxury vehicles, and consumer attitudes and activity around luxury vehicles. Vehicle segments represent those involving both traditional luxury vehicle makers and nontraditional luxury vehicle makers.
  • Sales figures throughout this report apply to new (not used) luxury cars, and are unit volume figures as reported by the manufacturers.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                      • The market
                        • Luxury car market estimated to top 2.5 million units
                          • Figure 1: Total US unit sales and fan chart forecast of Luxury cars, 2009-19
                        • Entry-level luxury cars now most common vehicle
                          • Figure 2: Total US unit sales of new luxury vehicles, by segment, 2012 and 2014
                        • Key players
                          • Four luxury brands represent nearly 50% market share
                            • Figure 3: Top 4 luxury car brands, July 2013-2014
                          • The consumer
                            • Luxury buyers want new and improved technology
                              • Figure 4: Reasons for wanting another vehicle, by luxury car intenders, May 2014
                            • Young consumers twice as likely to buy compact cars
                              • Figure 5: Luxury car purchase intenders by vehicle body style consideration, by age, May 2014
                            • Luxury car buyers want reliable maintenance and warranties
                              • Figure 6: Incentives and service features important to new vehicle intenders, May 2014
                            • Tech and audio features more likely to influence luxury buyers
                              • Figure 7: Tech and audio features important to luxury vehicle intenders, May 2014
                            • Opportunity for developing technologies to attract luxury car buyers
                              • Figure 8: Interest in developing technologies, functionality, features, and services when purchasing next new luxury car, May 2014
                            • What we think
                            • Issues and Insights

                                • What is next for entry-level luxury buyers?
                                  • The issues
                                    • The implications
                                      • What “next-gen” technology resonates with luxury car buyers?
                                        • The issues
                                          • The implications
                                            • Should luxury dealerships embrace a “no-pressure” environment?
                                              • The issues
                                                • The implications
                                                • Trend Application

                                                    • Trend: Life Hacking
                                                      • Trend: Return to the Experts
                                                        • Trend: Prepare for the Worst
                                                        • Market Size and Forecast

                                                          • Key points
                                                            • Luxury car market estimated to top 2.5 million units
                                                              • Figure 9: Total US unit sales and forecast of new luxury vehicles, 2009-19
                                                            • Luxury cars account for 15.5% of market
                                                              • Figure 10: Total US unit sales and forecast of total new vehicles and new luxury vehicles, 2009-19
                                                            • Fan chart forecast
                                                                • Figure 11: Total US unit sales and fan chart forecast of Luxury cars, 2009-19
                                                            • Market Drivers

                                                              • Key points
                                                                • Aging US fleet helps create demand from new luxury buyers
                                                                    • Figure 12: Average age of light Vehicles, 2002-13
                                                                  • Rise in median home prices increases luxury consumption
                                                                    • Figure 13: Median existing home prices vs new light vehicle sales, 2002-13
                                                                  • High gas prices may pave way for more hybrid luxury vehicles
                                                                    • Figure 14: All grades all formulations retail gasoline prices, 2000-14
                                                                  • Monthly payments made more affordable by leasing, but headwinds appear
                                                                    • Figure 15: New lease share of new vehicle financing, 2009-13
                                                                • Segment Performance

                                                                  • Key points
                                                                    • Entry–level luxury cars now most common vehicle
                                                                      • Figure 16: Total US unit sales of new luxury vehicles, by segment, 2012 and 2014
                                                                  • Segment Performance – Near-luxury

                                                                    • Key points
                                                                      • Near-luxury vehicle sales stable
                                                                        • Figure 17: Total US unit sales of near-luxury vehicles, 2009-14
                                                                      • Near-luxury crossovers and SUVs drive category
                                                                        • Figure 18: Total US unit sales of near-luxury vehicles, by category, 2009-14
                                                                    • Segment Performance – Entry-level Luxury

                                                                      • Key points
                                                                        • More affordable luxury brands selling fast
                                                                          • Figure 19: Total US unit sales of entry-level luxury vehicles, 2009-14
                                                                        • Entry-level luxury car and crossover sales equally strong
                                                                          • Figure 20: Total US unit sales of entry-level luxury vehicles, by category, 2009-14
                                                                      • Segment Performance – Mid-level Luxury

                                                                        • Key points
                                                                          • Mid-level luxury vehicles account for one third of new sales
                                                                            • Figure 21: Total US unit sales of mid-level luxury vehicles, 2009-14
                                                                          • Crossover/SUV sales drive segment
                                                                            • Figure 22: Total US unit sales of mid-level luxury vehicles, by category, 2009-14
                                                                        • Segment Performance – Elite Luxury

                                                                          • Key points
                                                                            • Elite luxury sales growth estimated to cool in 2014
                                                                              • Figure 23: Total US unit sales of elite luxury vehicles, 2009-14
                                                                            • Crossovers less prominent in elite luxury category
                                                                              • Figure 24: Total US unit sales of elite luxury vehicles, by category, 2009-14
                                                                          • Segment Performance – Exotic Cars

                                                                            • Key points
                                                                              • Corvette drives exotic luxury segment to strong growth
                                                                                • Figure 25: Total US unit sales of exotic cars, 2009-14
                                                                            • Leading Companies

                                                                              • Key points
                                                                                • Four luxury brands represent nearly 50% market share
                                                                                  • Figure 26: Top 10 luxury car brands, July 2013-2014
                                                                                • Competing in segment, BMW gains share with 3-Series
                                                                                  • Figure 27: BMW luxury car sales, by model, July 2013-2014
                                                                                • Mercedes-Benz sees growth in higher-end models
                                                                                  • Figure 28: Mercedes-Benz luxury car sales, by model, July 2013-2014
                                                                                • Having survived, Lexus looks to thrive
                                                                                  • Figure 29: Lexus luxury car sales, by model, July 2013-2014
                                                                                • GMC builds crossover/SUV vehicles only in near-luxury segment
                                                                                  • Figure 30: GMC luxury car sales, by model, July 2013-2014
                                                                                • Buick looks to smaller vehicles to attract new audience
                                                                                  • Figure 31: Buick luxury car sales, by model, July 2013-2014
                                                                                • Audi makes splash with diesel
                                                                                  • Figure 32: Audi luxury car sales, by model, July 2013-2014
                                                                              • Innovations and Innovators

                                                                                • Tesla releases downloadable software upgrade for Model S
                                                                                  • Figure 33: Tesla Model S software Update
                                                                                • Multiple smartphone integrations sure to entice buyers
                                                                                  • Headlight innovations go easily noticed by consumers
                                                                                    • Apple, Google enter integrated dashboards
                                                                                        • Figure 34: Apple CarPlay
                                                                                        • Figure 35: Android Auto
                                                                                    • Marketing Strategies

                                                                                      • Mercedes-Benz launches GLA on Instagram
                                                                                        • Figure 36: Mercedes-Benz Instagram ad, “#GLAPacked,” 2014
                                                                                      • Audi makes no compromise in launching A3 like a champion
                                                                                        • Figure 37: Audi television ad, “Dues,” March 2014
                                                                                        • Figure 38: Audi television ad, “Touch,” March 2014
                                                                                      • Lexus marks performance with “F”
                                                                                        • Figure 39: Lexus television ad, “Temptation,” June 2014
                                                                                      • BMW builds bobsled for 2014 Olympic Winter Games
                                                                                        • Figure 40: BMW television ad, “Hello Future,” February 2014
                                                                                    • Luxury Car Buyers

                                                                                      • Key points
                                                                                        • Most luxury car buyers have one or two vehicles
                                                                                          • Figure 41: Number of household vehicles owned by luxury car intenders, May 2014
                                                                                        • Luxury car buyers already own passenger cars
                                                                                          • Figure 42: Vehicle types already owned by luxury car intenders, May 2014
                                                                                        • Luxury car intenders approach buying process independently
                                                                                          • Figure 43: Who will be responsible for the purchase of the next luxury vehicle, May 2014
                                                                                      • Price Paid for Recently Purchased Vehicle

                                                                                        • Key points
                                                                                          • Buying luxury vehicle is a step up in price for most consumers
                                                                                            • Figure 44: Price paid for most recently purchased vehicle, May 2014
                                                                                          • In market segmented by price, high-end buyers represent 20%
                                                                                            • Figure 45: Price paid for most recently purchased vehicle, by household income, May 2014
                                                                                          • On average, luxury car buyers expect to pay $40,000
                                                                                            • Figure 46: Expected total price of next new car, May 2014
                                                                                        • New, Used, or CPO Luxury Vehicles in Household

                                                                                          • Key points
                                                                                            • Luxury car buyers want new cars, but CPO trend rising
                                                                                              • Figure 47: Luxury vehicle intenders by whether vehicle will be purchased new, used, or CPO, May 2014
                                                                                            • Men more likely to buy new
                                                                                              • Figure 48: Luxury vehicle intenders by whether vehicle will be purchased new, used, or CPO, by gender, May 2014
                                                                                            • More affluent luxury car buyers plan to buy new
                                                                                              • Figure 49: Luxury vehicle intenders by whether vehicle will be purchased new, used, or CPO, by household income, May 2014
                                                                                          • When Will Luxury Vehicle Purchase Occur?

                                                                                            • Key points
                                                                                              • Men more likely to buy soon
                                                                                                • Figure 50: Approximately when will the next luxury vehicle purchase occur, by gender, May 2014
                                                                                              • Parents expecting to buy luxury cars soon
                                                                                                • Figure 51: Approximately when will the next luxury vehicle purchase occur, by presence of children in household, May 2014
                                                                                              • Some 18-34s expect to buy within 30 days
                                                                                                • Figure 52: Approximately when will the next luxury vehicle purchase occur, by age, May 2014
                                                                                            • Motivators for Purchase of Luxury Vehicle

                                                                                              • Key points
                                                                                                • Luxury buyers want new and improved technology
                                                                                                  • Figure 53: Reasons for wanting another vehicle, by luxury car intenders, May 2014
                                                                                                • Luxury car buyers desire technology regardless of income
                                                                                                  • Figure 54: Reasons for wanting another vehicle, by luxury car intenders, by household income, May 2014
                                                                                              • Luxury Vehicle Types Considered

                                                                                                • Key points
                                                                                                  • Luxury car intenders prefer mid- and full-sized cars
                                                                                                    • Figure 55: Luxury car purchase intenders by vehicle body style consideration, by gender, May 2014
                                                                                                  • Crossovers/SUVs suitable as a family car
                                                                                                    • Figure 56: Luxury car purchase intenders by vehicle body style consideration, by presence of children in household, May 2014
                                                                                                  • Young consumers twice as likely to buy compact cars
                                                                                                    • Figure 57: Luxury car purchase intenders by vehicle body style consideration, by age, May 2014
                                                                                                • Monthly Payment versus Total Cost

                                                                                                  • Key points
                                                                                                    • Nearly half of luxury car intenders focus on total price
                                                                                                      • Figure 58: Monthly payment or total price on next luxury vehicle, by household income, May 2014
                                                                                                    • Many younger car buyers focused on monthly payments
                                                                                                      • Figure 59: Monthly payment or total price on next luxury vehicle, by age, May 2014
                                                                                                  • Incentives and Service Features Important to Luxury Vehicle Intenders

                                                                                                    • Key points
                                                                                                      • Luxury car buyers want reliable maintenance and warranties
                                                                                                        • Figure 60: Incentives and service features important to new vehicle intenders, May 2014
                                                                                                      • Women more focused on financial implications when buying luxury cars
                                                                                                        • Figure 61: Incentives and service features important to new vehicle intenders, by gender, May 2014
                                                                                                      • Attractive incentives and service depends on household income
                                                                                                        • Figure 62: Incentives and service features important to new vehicle intenders, by household income, May 2014
                                                                                                      • Warranties most attractive to older car buyers
                                                                                                        • Figure 63: Incentives and service features important to new vehicle intenders, by age, May 2014
                                                                                                    • Styling and Comfort Features Important to Luxury Vehicle Intenders

                                                                                                      • Key points
                                                                                                        • Luxury car buyers more likely to want most styling and comfort features
                                                                                                          • Figure 64: Styling and comfort features important to new vehicle intenders, May 2014
                                                                                                        • Women want comfortable, heated seats
                                                                                                          • Figure 65: Styling and comfort features important to new vehicle intenders, by gender, May 2014
                                                                                                        • Older luxury car buyers want creature comforts
                                                                                                          • Figure 66: Styling and comfort features important to new vehicle intenders, by age, May 2014
                                                                                                      • Tech and Audio Features Important to New Vehicle Intenders

                                                                                                        • Key points
                                                                                                          • Tech and audio features more likely to influence luxury buyers
                                                                                                            • Figure 67: Tech and audio features important to luxury vehicle intenders, May 2014
                                                                                                          • Men influenced by touchscreen, multimedia
                                                                                                            • Figure 68: Tech and audio features important to luxury vehicle intenders, by gender, May 2014
                                                                                                          • HD radio, rear-seat entertainment opportunities for entry-level segment
                                                                                                            • Figure 69: Tech and audio features important to luxury vehicle intenders, by household income, May 2014
                                                                                                          • Smartphone connectivity represents next generation of desired tech
                                                                                                            • Figure 70: Tech and audio features important to luxury vehicle intenders, by age, May 2014
                                                                                                        • Safety Features Important to Luxury Vehicle Intenders

                                                                                                          • Key points
                                                                                                            • Luxury car intenders more influenced by technology in safety features
                                                                                                              • Figure 71: Safety features important to new vehicle intenders, May 2014
                                                                                                            • Parents seek automated safety features
                                                                                                              • Figure 72: Safety features important to new vehicle intenders, by presence of children in household, May 2014
                                                                                                          • Top Vehicle Brands Seriously Considered by Luxury Car Intenders

                                                                                                            • Key points
                                                                                                              • Luxury brands less popular than household names
                                                                                                                • Figure 73: Top vehicle brands considered by those considering a luxury car, May 2014
                                                                                                              • Men more likely to consider domestic luxury car
                                                                                                                • Figure 74: Top vehicle brands considered by those considering a luxury car, by gender, May 2014
                                                                                                              • Women less interested in origin of brand
                                                                                                                • Figure 75: Type of luxury vehicles most likely to purchase, by gender, May 2014
                                                                                                            • Interest in Developing Technologies, Functionality, Features, and Services When Purchasing Next New Luxury Car

                                                                                                              • Key points
                                                                                                                • Wireless charging appeals to all, other new tech sought by luxury buyers
                                                                                                                    • Figure 76: Interest in developing technologies, functionality, features and services when purchasing next new luxury car, May 2014
                                                                                                                • Attitudes of Luxury Car Intenders toward Various Emerging Makes, Models, and Features

                                                                                                                  • Key points
                                                                                                                    • Acura and Cadillac perceived in same tier as BMW, Mercedes-Benz
                                                                                                                      • Figure 77: Attitudes of luxury car intenders toward various emerging makes, models and features, by gender, May 2014
                                                                                                                    • More affluent luxury car buyers see foreign brands as more luxurious
                                                                                                                      • Figure 78: Attitudes of luxury car intenders toward various emerging makes, models and features, by household income, May 2014
                                                                                                                  • Race and Hispanic Origin

                                                                                                                        • Figure 79: Household ownership of main luxury brand vehicles, by race/Hispanic origin, April 2013-June 2014
                                                                                                                        • Figure 80: Select attitudes and opinions about cars, by race/Hispanic origin, April 2013-June 2014
                                                                                                                        • Figure 81: Decision makers for automobiles purchased in the past year by household for luxury car buyers, by race/Hispanic origin, April 2013-June 2014
                                                                                                                        • Figure 82: When next new vehicle will be purchased by luxury car buyers, by race/Hispanic origin, April 2013-June 2014
                                                                                                                    • Appendix – Other Useful Consumer Tables

                                                                                                                      • Who will be responsible for luxury purchase
                                                                                                                        • Figure 83: Who will be responsible for the purchase of the next luxury vehicle, by area, May 2014
                                                                                                                      • Type of most recently purchased vehicle
                                                                                                                        • Figure 84: Type of most recently purchased vehicle, May 2014
                                                                                                                        • Figure 85: Type of most recently purchased vehicle, by gender, May 2014
                                                                                                                        • Figure 86: Type of most recently purchased vehicle, by household income, May 2014
                                                                                                                      • New, used, or CPO
                                                                                                                        • Figure 87: Luxury vehicle intenders by whether vehicle will be purchased new, used, or CPO, by age, May 2014
                                                                                                                      • When will next luxury vehicle purchase occur?
                                                                                                                        • Figure 88: Approximately when will the next luxury vehicle purchase occur, May 2014
                                                                                                                        • Figure 89: Approximately when will the next luxury vehicle purchase occur, by household size, May 2014
                                                                                                                      • Reasons for wanting another vehicle
                                                                                                                        • Figure 90: Reasons for wanting another vehicle, by luxury car intenders, by age, May 2014
                                                                                                                      • Vehicle body style consideration
                                                                                                                        • Figure 91: Luxury car purchase intenders by vehicle body style consideration, May 2014
                                                                                                                      • Monthly payment or total price
                                                                                                                        • Figure 92: Monthly payment or total price on next luxury vehicle, May 2014
                                                                                                                      • Type of luxury vehicle most likely to purchase
                                                                                                                        • Figure 93: Type of luxury vehicles most likely to purchase, by household income, May 2014
                                                                                                                        • Figure 94: Type of luxury vehicles most likely to purchase, by age, May 2014
                                                                                                                      • Top vehicle brands considered
                                                                                                                        • Figure 95: Top vehicle brands considered by those considering a luxury car, by age, May 2014
                                                                                                                        • Figure 96: Top vehicle brands considered by those considering a luxury car, by household income, May 2014
                                                                                                                      • Interest in developing technologies
                                                                                                                        • Figure 97: Interest in developing technologies, functionality, features and services when purchasing next new luxury car, by age, May 2014
                                                                                                                      • Attitudes toward emerging makes, models, and features
                                                                                                                        • Figure 98: Attitudes of luxury car intenders toward various emerging makes, models and features, by age, May 2014
                                                                                                                    • Appendix – Trade Associations

                                                                                                                      • Appendix – Market Segment Classification

                                                                                                                          • Figure 99: Segment classification, by make and model – Elite-luxury, 2014
                                                                                                                          • Figure 100: Segment classification, by make and model – Entry-level, 2014
                                                                                                                          • Figure 101: Segment classification, by make and model – Exotic, 2014
                                                                                                                          • Figure 102: Segment classification, by make and model – Mid-Luxury, 2014
                                                                                                                          • Figure 103: Segment classification, by make and model – Near-Luxury, 2014

                                                                                                                      Companies Covered

                                                                                                                      • Audi of America Inc
                                                                                                                      • BMW of North America, LLC
                                                                                                                      • Daimler AG
                                                                                                                      • General Motors Corporation
                                                                                                                      • Mercedes-Benz USA
                                                                                                                      • Toyota Motor Corporation
                                                                                                                      • Volkswagen of America, Inc.

                                                                                                                      Luxury Cars - US - October 2014

                                                                                                                      £3,174.67 (Excl.Tax)