Luxury Crossover SUVs Gaining Market Share at Expense of Midsize SUVs: J.D. Power Study
The luxury crossover SUV segment is steadily gaining market share, often at the expense of the traditional midsize SUV segment, according to a Power Information Network (PIN) Market Assessment Study released Aug. 15 by J.D. Power and Associates. This study, the second in a series released this year, focuses on the luxury vehicle market.Since 1991 luxury sport utilities have gained 1.8 points of market share."The four luxury crossover SUVs -- Acura MDX, BMW X5, Lexus RX 300 and Mercedes-Benz M-Class -- are attracting a lot of traditional, non-luxury SUV owners," said Tom Libby, analyst and director of PIN consulting operations at J.D. Power and Associates. "These luxury SUVs offer a car-like ride with the off-road capabilities of a truck, along with prestigious brand names. And all this for a price not much more than that of a loaded non-luxury SUV."Luxury vehicles overall have moved from 8.6 percent of the new-vehicle market in 1991 to 9.2 percent in 2001, with growth attributable to the luxury SUV and entry luxury segments. Luxury SUVs have climbed from 1 percent of the market in 1991 to 1.9 percent currently, while the entry luxury segment has grown from 1.7 percent to 3.8 percent. The luxury car market shows some interesting trends as well, according to Libby."The entry luxury car segment has benefited from the long economic boom of the 1990s and the fact that luxury brands are moving downstream," Libby said. "A $25,000 Mercedes-Benz, for example, is going to be quite appealing to a lot of consumers." On loyalty, Cadillac, which had led luxury sales through 1997, leads the luxury market in customer loyalty. More than 75 percent of Cadillac customers who have traded in a Cadillac in 2001 have purchased another one. Lincoln is second in loyalty and just slightly behind Cadillac. Mercedes-Benz (74.3 percent) and Acura (70.3 percent) have the highest loyalty among the European and Asian luxury brands, respectively.In sales, domestic luxury nameplates Lincoln and Cadillac have lost share in the luxury market. They are now fourth and sixth, respectively, in sales among luxury brands. Of the 56 luxury vehicles in the marketplace, just 13 are produced by domestic manufacturers.Also, the domestics are losing younger buyers to the imports. The average age of the buyer of mid-luxury domestic cars is 67, while the average age of mid-luxury import car buyers is just 52.Domestic manufacturers, cognizant of this potential problem, have some new products coming to market in the near future, including the Cadillac CTS and Lincoln sport utility, that are targeted at younger buyers. About PINPIN is a nationwide electronic data collection network that gathers new-vehicle transaction data from more than 5,000 participating auto retailers in 23 major metropolitan U.S. markets. The data that PIN collects includes more than 200 data points from each new-vehicle transaction, ranging from actual transaction prices, rebates and incentives to customer demographics.This is the second of four PIN Market Assessment Studies that J.D. Power and Associates will release in 2001. In addition, each study will be updated with the most recent information every two months for one year from the release date of the study.The PIN Market Assessment Studies break new ground for J.D. Power and Associates because they combine information from all three of the firm’s comprehensive automotive databases: Power Information Network, customer satisfaction and product quality data from its industry-wide syndicated studies and its sales and forecasting data. About J.D. Power and AssociatesHeadquartered in Agoura Hills, Calif., J.D. Power and Associates is a global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction.The firm’s quality and satisfaction measurements are based on actual customer responses from millions of consumers annually.