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Luxury Cars - US - October 2019

"Despite being a segment synonymous with power and style, consumers have seemingly lost interest in luxury vehicles. Generally speaking, consumers struggle to see luxury vehicles as good quality, even if they’re made with superior materials. And when it comes to classifying what makes a luxury vehicle, the brand of the automaker no longer carries any weight. The good news is that luxury automakers have the opportunity to regain control of the conversation and help consumers become reacquainted with what it truly means to be a luxury car brand."
- Hannah Keshishian, Automotive Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

          • 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

                      • 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

                            • Consumer sentiment falls below 90
                              • Figure 1: Consumer Sentiment Index, January 2007-September 2019
                            • Disposable Personal Income growth is slowing down
                              • Figure 2: Disposable Personal Income change from previous period, January 2007-July 2019
                            • Gas prices expected to climb amid oil field attacks
                              • Figure 3: US gasoline and diesel retail prices, January 2007-August 2019
                          • US Vehicle Sales Brand Performance

                            • BMW, Mercedes-Benz, and Lexus top luxury brand performance
                              • Figure 4: US auto sales by brand performance, 2019 calendar year-to-date
                            • Luxury vehicle sales have been declining over the past five years
                              • Figure 5: US vehicle sales brand ranking by performance, August 2015 -19
                          • Key Players – What You Need to Know

                            • 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?

                                  • Cadillac bets on their tech for brand revitalization
                                      • Figure 6: Cadillac Super Cruise, August 2019
                                    • Volvo honored in Fast Company’s 2019 Innovation by Design Awards
                                      • Figure 7: Volvo E.V.A. Initiative, March 2019
                                  • What’s Struggling?

                                    • Audi comes under fire for E-Tron battery range
                                      • Ferrari fights to keep V-12 engines amid emission restrictions
                                      • What’s Next?

                                        • 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

                                            • 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

                                                      • Most consumers own more than one vehicle
                                                        • Figure 8: Number of vehicles in household, July 2019
                                                      • Lexus, BMW and Mercedes-Benz most owned luxury vehicles
                                                        • Figure 9: Top five luxury brands in the household, May 2019
                                                        • 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
                                                        • Figure 12: Household Tesla ownership, by net worth, May 2019
                                                    • Luxury Car Purchase Consideration

                                                      • Consumer purchase timelines remain the same despite income levels
                                                        • Figure 13: Purchase timeline, by net worth, May 2019
                                                      • Most consumers plan to buy “new” vehicles
                                                        • Figure 14: Purchase types considered, July 2019
                                                      • More than a third of A/HNW consumers wouldn’t consider purchasing a luxury vehicle
                                                        • Figure 15: Purchase types considered, July 2019
                                                    • Luxury Brand Attributes

                                                      • Luxury automakers are generically seen as “stylish”
                                                        • Figure 16: Luxury automaker brand attributes, July 2019
                                                      • Affluent/high net worth consumers consider Volvo to be the safest luxury vehicle
                                                        • Figure 17: Luxury brand safety perception, by net worth, may 2019
                                                        • 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”
                                                        • Figure 20: Luxury brand good value perception, by net worth, may 2019
                                                      • Luxury automakers have an opportunity among young female consumers
                                                        • Figure 21: Stylish luxury automakers, by gender and age, may 2019
                                                        • Figure 22: High performance luxury automakers, by gender, may 2019
                                                    • Attitudes Toward Luxury Cars

                                                      • Price determines what consumers consider to be a “luxury”
                                                          • Figure 23: Luxury determining factors, may 2019
                                                        • While most A/HNW consumers prefer “the finer things”…
                                                          • 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
                                                          • Figure 25: Luxury car affordability, may 2019
                                                        • Whereas suburban consumers agree luxury vehicles fit within their budget
                                                          • Figure 26: Luxury car affordability, may 2019
                                                        • Young consumers seek luxury vehicles as a way to impress others
                                                          • Figure 27: Luxury car affordability, may 2019
                                                        • Parents who say they drive a lot are attracted to luxury vehicles
                                                          • Figure 28: Luxury car affordability, may 2019
                                                      • Appendix – The Consumer

                                                        • Jaguar primarily popular among middle-aged consumers
                                                            • Figure 29: Lexus brand attribute, by age, May 2019
                                                            • Figure 30: Lexus brand attribute, by gender, May 2019
                                                            • Figure 31: Jaguar, Facebook ad, September 2019
                                                        • Appendix – Data Sources and Abbreviations

                                                          • Data sources
                                                            • Fan chart forecast
                                                              • Consumer survey data
                                                                • Direct marketing creative
                                                                  • Abbreviations and terms
                                                                    • Abbreviations

                                                                    Luxury Cars - US - October 2019

                                                                    £3,435.47 (Excl.Tax)