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Luxury Cars - US - October 2016

The luxury car market is an extremely competitive market and ranges from 5-10% of the overall new car market. Luxury vehicles are typically more expensive and equipped with the latest features and technology and appeal to consumers who want the latest and greatest for their vehicle. Finding opportunities in the market and delivering marketing content that appeals to the strengths of the brand and desires of the consumer should lead to success.

This report examines the following issues:

  • Recent surge in off-lease vehicles could impact decision to opt for new
  • Affordability still a concern for many consumers
  • Consumers don’t have a favorite luxury brand
  • Luxury cars considered high maintenance
  • Regular makes are increasingly competing with luxury makes on features

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.

he next few years will be a great opportunity for luxury brands to increase sales as well as market share. A large number of vehicle purchase intenders are considering luxury cars, but many will opt for cheaper entry-level vehicles. Luxury makers will need to compete with each other for market share, but they will also need to attempt to win over as many consumers on the fence between a luxury brand and mainstream brand. Standing out in terms of technology, convenience, and style not only will win luxury car shoppers but can also convince consumers to make the transition to a luxury brand. Brands with diverse, high-quality offerings within the SUV (sport utility vehicle) and crossover categories should see success as well moving forward.

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

          • The issues
            • Recent surge in off-lease vehicles could impact decision to opt for new
              • Affordability still a concern for many consumers
                • Figure 1: Luxury attributes, July 2016
              • Consumers don’t have a favorite luxury brand
                • Figure 2: Attitudes toward luxury vehicles, July 2016
              • Luxury cars considered high maintenance
                • Figure 3: Attitudes toward luxury vehicles, July 2016
              • Regular makes are increasingly competing with luxury makes on features
                • Figure 4: American Honda Motor Co., Direct mail, June 2016
              • The opportunities
                • Men more likely to consider a luxury car for their next purchase
                  • Figure 5: Luxury or premium brand consideration, by gender, July 2016
                • Luxury car buyers more likely to purchase
                  • Figure 6: Luxury or premium brand consideration, by car purchase intent, July 2016
                • Consumers want comfort over performance
                  • Figure 7: Attitudes toward luxury vehicles, by select demographics, July 2016
                • What it means
                • The Market – What You Need to Know

                  • Luxury market expected to grow
                    • American infatuation for SUVs and crossovers also apply to the luxury market
                      • Off-lease luxury vehicles pose challenges and opportunities
                      • Market Size and Forecast

                        • Slow growth expected for luxury vehicles
                          • Figure 8: Total US sales and fan chart forecast of new luxury cars, at current prices, 2011-21
                          • Figure 9: Total US sales and forecast of new luxury cars, at current prices, 2011-21
                      • Market Breakdown

                        • Luxury SUVs and crossovers experience unprecedented growth
                          • Figure 10: Total US unit sales of new luxury cars by segment, 2011-2015
                          • Figure 11: Total US unit sales and market share of new luxury cars by segment, 2014-2015
                        • American brands successful in the SUV/crossover segment
                          • Figure 12: Luxury SUV/Crossover sales by brand, 2015
                      • Market Factors

                        • Interest rates starting to rise, but remain historically low
                          • Figure 13: Average loan rates, Q2 2015 & Q2 2016
                        • Off-lease vehicles could depress demand for new vehicles
                          • Millennials buying new and considering luxury brands
                            • Figure 14: Share of US population by generation, 2011- 2021 
                            • Figure 15: Luxury or premium brand consideration, by generation, July 2016
                        • Key Players – What You Need to Know

                          • Tesla’s Model 3 gets over 400K reservations
                            • Ford and BMW’s innovations spur interest
                              • Audi avoids stigma from Dieselgate
                                • Lincoln to provide on-demand service and repair with complimentary loaner cars for 2017 models
                                  • Preference for SUVs and crossovers favor GM and Chrysler
                                  • Manufacturer Sales of Luxury SUVs and Crossovers

                                    • Nearly every brand saw growth in the SUV/crossover segment
                                      • Figure 16: Luxury SUV and crossover sales by manufacturer, 2011 – 2015
                                  • What’s Working?

                                    • Tesla Model 3 gets over 400K reservations
                                      • Rebooted Ford Mustang dominating sales
                                        • Figure 17: Ford Mustang direct mail brochure, July 2016
                                      • BMW’s i8 showcases latest foray into Hybrid technology
                                        • Figure 18: BMW i8, BMW mobile advertisement, January 2016
                                    • What’s Struggling?

                                      • Electric vehicles not named Tesla
                                      • What’s Next?

                                        • Lincoln to provide on-demand service and maintenance for 2017 models
                                          • Driver awareness monitoring
                                          • The Consumer – What You Need to Know

                                            • Consumers view European brands as most luxurious
                                              • Older Millennials most likely to consider a luxury car
                                                • Consumers agree luxury cars are self-indulgent purchases for people who want to project a certain image
                                                  • Affordability a concern for many consumers considering a luxury brand
                                                    • Hispanics most likely and Asians least likely to base luxury on brand
                                                    • Luxury Car Buyers

                                                      • Older Millennials are the primary target for luxury vehicles
                                                        • Figure 19: Luxury or premium brand consideration, by millennials vs non millennials, July 2016
                                                      • Men more likely to consider a luxury brand
                                                        • Figure 20: Luxury or premium brand consideration, by gender, July 2016
                                                        • Figure 21: Attitudes toward luxury vehicles, by gender, July 2016
                                                    • Attitudes toward Luxury Vehicles

                                                      • Younger wealthier parents favor foreign luxury brands over domestic
                                                        • Figure 22: Attitudes toward luxury cars – CHAID – Tree output, July 2016
                                                      • Luxury cars are the ultimate “Treat yourself” purchase
                                                        • Figure 23: Attitudes toward luxury vehicles, by luxury vehicle consideration, July 2016
                                                    • Luxury Attributes

                                                      • Affordability a concern for many potential luxury car buyers
                                                        • Figure 24: Luxury attributes, July 2016
                                                      • Older adults emphasize affordability
                                                        • Figure 25: Luxury attributes – Affordability most important, by age, July 2016
                                                      • Brand most important to men
                                                        • Figure 26: Luxury attributes – Brand most important, by gender and age, July 2016
                                                    • Luxury Brand Perceptions

                                                      • Hispanics most likely to determine luxury by brand
                                                        • Figure 27: Luxury brand perception, Audi, by race and Hispanic origin, July 2016
                                                      • Asians least likely to determine luxury by brand
                                                        • Figure 28: Attitudes toward luxury vehicles, July 2016
                                                      • Mercedes-Benz regarded highly by consumers
                                                        • Figure 29: Luxury brand perceptions, Luxurious, July 2016
                                                      • Tesla seen as cutting edge, but not safe
                                                        • Figure 30: Luxury brand perceptions – cutting edge, safe, July 2016
                                                    • Appendix – Data Sources and Abbreviations

                                                      • Data sources
                                                        • Sales data
                                                          • Fan chart forecast
                                                            • Consumer survey data
                                                              • Direct marketing creative
                                                                • Abbreviations and terms
                                                                  • Abbreviations
                                                                    • Terms
                                                                    • Appendix – Market

                                                                        • Figure 31: Total US unit sales and market share of new luxury vehicles, by segment, 2011-15
                                                                    • Appendix – Key Players

                                                                        • Figure 32: Total US luxury vehicle sales and market share, by make, 2011-15

                                                                    Companies Covered

                                                                    To learn more about the companies covered in this report please contact us.

                                                                    Luxury Cars - US - October 2016

                                                                    £3,199.84 (Excl.Tax)