Sales of Luxury SUVs Hit Record High, New Edmunds Report Reveals
2018 could be a banner year for luxury automakers as demand for SUVs soars, but Edmunds analysts warn that, as luxury brands expand their offerings, they’ll have to work harder to convince shoppers brand cachet is worth paying extra for
Santa Monica, CA — September 13, 2018 — The luxury vehicle market is on track for a near-record year, according to a new report released by the car shopping experts at Edmunds. Edmunds data reveals that 1.3 million new luxury vehicles were sold through August 2018, accounting for 11.4 percent of the market. Edmunds analysts note that an expanding lineup of SUVs is driving this massive growth, with sales of luxury SUVs hitting an all-time high of 62 percent of luxury vehicle sales so far this year.
“Luxury SUVs are a winning strategy all around right now. Car buyers are willing to consider an SUV in pretty much any form they can get them, and the premium price tags SUVs command make for nice profit engines for automakers,” said Jeremy Acevedo, manager of industry analysis at Edmunds. “However, the flood of SUVs in the market is also driving up prices of new vehicles overall, blurring the lines in the eyes of car shoppers of what ‘luxury’ really means.”
The 2018 Edmunds Luxury Report takes a closer look at the factors creating this shift in luxury identity and conducts a deep dive into the state of the luxury auto market to identify who’s winning, where the missed opportunities are, and what’s on the horizon for the industry.
Key findings include:
- The price gap between luxury and mainstream vehicles is shrinking. Edmunds data reveals that the price gap between luxury and mainstream vehicles has narrowed from 58 percent to 48 percent in the last 10 years.
- The mass migration to SUVs has removed some of the luster from luxury nameplates. On average, a midsize car from a luxury brand sells for 107 percent more than one from a mainstream brand, but a midsize SUV from a luxury brand only sells for 48 percent more than one from a mainstream brand. Edmunds experts note this could pose a risk to luxury brands as shopper preferences continue to move toward larger vehicles.
- Jaguar, Porsche, BMW and Audi do the best job at attracting “luxury loyalists,” or car shoppers who only cross-shop luxury vehicles. Lincoln, Volvo and Acura shoppers are most likely to attract shoppers who are also cross-shopping mainstream brands.
- Lincoln, Genesis, Cadillac and Volvo attract a competitively lower share of luxury loyalists, but do the best job of keeping those buyers loyal to their brands. While brands such as Porsche, Jaguar and Land Rover attract a lot of luxury shoppers, they’re missing an opportunity to keep them in the family, as a high share of shoppers opt to trade in their vehicles for a luxury vehicle from another brand.
“The luxury auto market is strong but at a crossroads, especially with the uncertainty around tariffs,” said Acevedo. “As luxury brands push into vehicle segments dominated by ever more premium offerings from mainstream brands, they’re going to have to work harder to convince shoppers the brand cachet is worth paying extra for.”
Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price and buy a car with confidence. Regarded as one of America’s best workplaces by Fortune and Great Place to Work, Edmunds is based in Santa Monica, California, and has a satellite office in Detroit, Michigan. Follow us on Twitter, Facebook and Instagram.
Talia James, Edmunds, 310-309-4900, PR@edmunds.com