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"Luxury Car" redirects here. For the Chinese film, see Luxury Car (film).

Luxury vehicle is a marketing term for a vehicle that provides luxury — pleasant or desirable features beyond strict necessity—at increased expense (see: definition of luxury).

The term suggests a vehicle with greater equipment, performance, construction precision, comfort, design ingenuity, technological innovation, or features that convey brand image, cachet, status, or prestige—or any other discretionary feature or combination of features.

In contemporary usage, the term may be applied to any vehicle type— including sedan, coupe, hatchback, station wagon, and convertible body styles, as well as to minivans,[1][2] crossovers, or sport utility vehicles and to any size vehicle, from small to large—in any price range.[3]

Definition

A Duesenberg, "one of the greatest luxury cars"[4] with custom body by Willoughby.

Automobile manufacturers market specific makes and models that are targeted at particular socio-economic classes, and thus "social status came to be associated more with a particular vehicle than ownership of a car per se."[5] Therefore, automakers differentiate among their product lines in "collusion" with the car-buying public.[5] While a high price is the most frequent factor, it is "styling, engineering, and even public opinion which cars had the highest and lowest status associated with them."[5]

Every era in automobile history has had "a group of car marques and models that have been expensive to purchase, due to their alleged superiority of their design and engineering".[5] Aimed at wealthy buyers, such automobiles might be generically be termed luxury cars."[5] This term is also used for unique vehicles produced during "an era when luxury was individualistic consideration, and coachwork could be tailored to an owner like a bespoke suit."[6] Although there is considerable literature about specific marques, there is a lack of systematic and scholarly work that "analyzes the luxury car phenomenon itself."[5]

Though widely used, the term luxury is broad and highly variable. It is a perceptual, conditional and subjective attribute and may be understood differently by different people: "What is a luxury car to some... may be 'ordinary' to others."[3]

Global references

Italian Isotta-Fraschini Tipo 8A S LeBaron Boattail Roadster was a 1930s luxury car.[7]

According to the European Commission, the "luxury vehicle" segment is classified as F-segment. However, the boundaries between the traditional segments are increasingly becoming blurred and diluted as features once exclusive to luxury vehicles become standard equipment on even small cars.[8][9][10]

  • ACRISS is a code system used by many car rental companies in the US for classifying vehicles (but not brands or marques). The system includes Luxury and Premium categories.
  • Australia In Australia, for taxation purposes a luxury car is defined as a passenger car whose value exceeds a certain threshold[11] (see: Luxury Car Tax).[12]
  • Germany: In Germany the term "Upper class" (German: Oberklasse) is used.[citation needed]
  • Russia: Russian markets use the term "representative class vehicle" (Russian: автомобиль представительского класса, also translated as "luxury vehicle").[13]
  • United States Consumer Guide's categorization which sorts luxury vehicles by size acknowledges that there can be considerable price variations within a class; for instance the Lincoln Town Car has a relatively low MSRP (Manufacturer's Suggested Retail Price) compared to the Jaguar XJ, BMW 7 Series, Lexus LS, or Mercedes-Benz S-Class.[14]
Luxury Car Segments, according to MSRP
Price $15k — $20k $20k — $30k $30k — $40k $40k — $50k $50k — $60k $60k — $70k $70k — $80k $80k — $90k $90k — $100k $100k or more
$29k $38k $40k $60k
Luxury car manufacturers Entry-level Mid-level High-end Ultra

Luxury market segments

Premium compact segment

The premium compact segment[clarification needed] is relatively new, having been initiated by several European brands in the mid-2000s, and constitute the least expensive offerings in their lineups. These cars are targeted at a niche market of young customers who have a more refined taste in their automobiles and the means to pay for them.[citation needed] By offering a smaller, lighter, more fuel-efficient, and less expensive vehicle, this serves to introduce a younger customer to the luxury marque, in hopes of retaining the coveted customer loyalty.[citation needed] This includes the Audi A3, BMW 1 Series, and Mercedes-Benz B-Class.[15][16][dead link] [17]

Premium compacts may share components with mass market cars from the marque's parent company (the A3), and/or have less sophisticated platforms compared to upmarket vehicles in the lineup (such as the B-Class). The body style tends to be a hatchback or compact wagon, previously associated with economy cars but regaining popularity in the United States for its afforded utility. The luxury branding and style, high-quality interior materials, wide range of convenience features, and performance powertrains are key to distinguishing them from mass market equivalents (one mistake made by the Cadillac Cimarron) and making these appeal to consumers.[17] [18][19]

The classification varies, for instance Consumer Guide Automotive in the US considers the Audi A3 and A4 as part of the premium compact segment due to similar size and MSRP, though these are known in Europe as a small family car and a compact executive car, respectively.[20]

Entry-level luxury/compact executive cars

The entry-level luxury category is also known as the compact executive car in Britain and (Mittelklasse in German). In the US, this segment mostly includes the bottom vehicles in the line-up of luxury brands as well as the top-of-the-line models of some non-luxury brands.[20]

Compact executive cars tend to have complex powertrain and mechanical layouts, resulting in increased cost and reduced interior passenger and trunk space, compared to mass market compact cars. However, material and building quality is higher, there are exclusive features not found on mass market cars, there is better handling and performance, and the nameplate itself is part of the value proposition.[14]

Compact executive cars include the Volvo S60, Lexus IS, BMW 3 Series, and Mercedes-Benz C-Class which particularly emphasize sporty handling.[citation needed] Other vehicles such as the Lexus ES and Acura TL are also considered entry-level luxury as well,[citation needed] though they do not fall under European luxury classifications as they are larger and not sold there.

Recently, the entry-level luxury has been very competitive, and there has been price-overlapping with well-equipped non-luxury cars.[21][22] The bestselling vehicles of the marque are frequently compact executive cars, such as the BMW 3 Series that makes up 40% of the vehicles that BMW sells worldwide.[23][24]

Mid-luxury/executive cars

The mid-luxury segment are commonly referred to as executive cars in Britain, Obere Mittelklasse in German, and Grandes Routières in French. Examples include the Volvo S80, BMW 5 Series, Mercedes-Benz E-Class, and Jaguar XF [25]

Although having similar dimensions to mid-size cars and large family cars, executive cars are engineered and positioned as premium vehicles with better performance and technology amenities. There is also higher development and production costs, as many well-known mid-luxury cars use the longitudinal (usually front engine rear wheel drive layout) engine mounting which affords space for powerful engines such as a V8, instead of the more economical traverse engine layout of mass market cars which are restricted to inline-4 or V6. Executive cars usually have lower sales and production volumes compared to mid-size cars and large family cars, as base trims with less equipment and smaller engines are not sold in U.S. and Canadian markets.[26] Also due to the problem of steep depreciation, especially concerning cars from less prestigious brands, most executive cars are produced by marques that specialize in larger/more expensive vehicles.

Vehicles in this segment include the mid-range models of several luxury car manufacturers.[27] There are also some flagship sedans in this segment, such as the Acura RL and Infiniti M37/56. Executive cars such as the BMW 5 Series are crucial to a luxury automaker's bottom line, and although not the highest-selling model, they generate a significant amount of profits due to the lucrative technology options.[24]

High-end luxury/full-size luxury cars

Also known as full-size luxury cars, grand saloons, or premium large cars, while "Oberklasse" is used in Germany. Many of these are the marque's showcases for the newest automotive technology.[28] Several nameplates also offer long-wheelbase versions that offer additional rear legroom and anemities.[29] Full-size luxury cars sold in Canada and the U.S. typically have mid-displacement V8 engines, though recently some marques have offered six cylinders but without much success.[30][31]

Vehicles in this category include some of the models from the flagship lines of luxury car brands. Examples include the Lexus LS, Audi A8, Volkswagen Phaeton, BMW 7 Series, Mercedes-Benz S-Class, Jaguar XJ and in the US, the Lincoln Town Car and Cadillac DTS.[14][25]

Ultra-luxury cars

Maybach 62, an ultra-luxury Mercedes-Benz automobile.

R.L. Polk and Company, a global automotive information and marketing firm that provides solutions to automotive and related industries, has defined the term "super luxury" segment for luxury cars costing more than $100,000 USD. This bracket includes the entire lineup of Rolls Royce, Bentley, Aston Martin, Maybach, and Maserati. The top-performing variants of flagship cars from Audi, BMW, Mercedes-Benz , Lexus, and Jaguar are often included here, some featuring 12-cylinder (usually V12) engines for great refinement and smoothness (even though contemporary V8 engines can make similar output), and with standard luxury and technology anemieties that would be considered optional on their V8 siblings.[31][32][33]

There are ultra-high performance cars from "exotic brands" that also exceed the $100,000 USD mark, but would not necessarily be categorized as luxury automobiles, such as the sports cars from Ferrari, Lamborghini and Porsche.[32]

Luxury SUV/Crossover

The popularity of the luxury-type sport utility vehicle (SUV) segment is a recent development.[34] .[35]

However, this category can be said to have been created with Kaiser Jeep's 1966 Super Wagoneer as the first true luxury four-wheel drive (4x4) vehicle.[36] It was the first SUV to offer a V8 engine, automatic transmission, and luxury car trim and equipment in a serious off-road model.[37] The Super Wagoneer was "a pioneer that blazed a trail for today's luxury SUVs".[38] It came with long list of standard equipment that included bucket seating with center console, air conditioning, seven-position tilt steering wheel, a vinyl roof, as well as "Antique Gold" trim panels on the body sides and tailgate.[38] After American Motors Corporation (AMC) purchased Jeep, the vehicles were upgraded and refined, including features such as an optional electric sliding steel sun roof, "possibly the first offered on an SUV".[39] The late-1970s Jeep Wagoneer Limited "set the sport-utility market on its ear ... was the most luxurious four-wheeler anyone had ever seen."[40]

The SUV models generated higher-profit-margins than ordinary automobiles, and automakers introduced new luxury models during the late 1990s.[41] For some manufacturers such as Porsche and BMW, luxury SUVs were the first SUV models they produced. Luxury SUVs catered particularly to the U.S. and Canadian markets where station wagons were unpopular, often being produced in these markets (such as BMW Spartanburg) instead of the luxury marque's home country. Some of these models were not traditional SUVs based on light trucks, rather they are classified as crossovers using unibody constructions. SUVs from non-luxury brands had experienced a surge in popularity through early 2000s, causing the traditional luxury marques to follow.[42]

SUVs from the luxury marques grew at almost 40 percent to more than 430,000 vehicles, excluding SUV-only brands like Hummer and Land Rover, while luxury car sales in the U.S. during 2003 suffered a 1% decline, and non-luxury SUV sales were flat. By 2004, 30 percent of major luxury brands' U.S. sales are now SUVs. Luxury brands in particular led the development of crossover SUVs (as opposed to body-on-frame SUVs), making it one of the fastest growing segments in the market, as the forecast for 2002 was approximately 240,000 vehicles and that could double by 2006.[43] Research data showed luxury SUV buyers are compared those vehicles to SUVs of mass market brands, and not shopping around luxury cars, thus the SUV is becoming the key to bringing new customers to the luxury dealerships.[44]

Certain luxury SUVs use body-on-frame underpinnings, often being badge-engineered versions of their non-luxury counterparts, and retaining the rugged off-road and towing capabilities. Examples include the Lexus LX and Lincoln Navigator, which are the premium versions of the Toyota Land Cruiser (itself a luxurious SUV in the United States) and Ford Expedition, respectively.[45]

Other luxury SUVs are crossovers using unibody construction, often sharing the platform with compact executive and executive cars. For example, the Infiniti FX is based upon the Nissan FM platform that also underpins other Infiniti cars. Audi and BMW developed crossovers to compete in the SUV segment as they did not have an existing body-on-frame vehicle in their lineup.[43][46] The Lexus RX was the earliest luxury crossover on the market, and it has since been the best-selling luxury vehicle in the US, so it has inspired similar competitors from rival marques.[47] While early luxury crossovers released in the late 1990s have resembled traditional boxy SUVs, recent offerings have prioritized sportiness over utility — such as the Infiniti FX and BMW X6.[48][49][50]

Characteristics

A Spanish luxury car brand was Hispano-Suiza, here is twelve cylinder J12.
Template:Globalize/Northern

Luxury cars tend to offer a higher degree of comfort than their mainstream counterparts, common amenities include genuine leather upholstery and polished "woodgrain-look" dashboards.[25] Compared to mainstream vehicles, luxury cars have traditionally emphasized comfort and safety.[51] Luxury vehicles are also a status symbol for conspicuous consumption.[52]

Contemporary luxury cars also offer higher performance and better handling, which is often known as sport luxury.[53][54] However in Europe, where large-displacement engines are often heavily taxed and many luxury buyers shy away from conspicuous consumption, brands offer buyers the option of removing exterior engine-identifying badges.[30]

Forbes noted that the reputation of luxury marques enables them to continually introduce many new safety technologies and comfort amenities, such as anti-lock brakes, electronic stability control and DVD entertainment systems, before they trickle down to mass market cars. Numerous "smart car" features are largely only found on luxury cars as of 2009. [52]

The rear-wheel drive with longitudinal engines (FR) is a common layout of luxury cars. European marques like Mercedes-Benz, BMW, and Jaguar have almost never adopted front-wheel drive and retained a lineup mostly or entirely made up of FR cars. Japanese brands such as Lexus and Infiniti also have predominantly FR lineups. The FR layout, while more expensive than the FF, has been retained by these luxury manufacturers as it allows for higher performance engines (particularly the straight-6, V8, and other engine configurations with more cylinders), better handling, and a smoother ride. [30] [55] [56][57]

American manufacturers also largely followed the FR for their luxury brands (as well as their mass-market cars of the time). However, due to the Arab Oil Embargo of 1973 and the 1979 fuel crises, began eliminating their FR platforms in favor of the more economical front wheel drive transverse engine layout (FF). Chrysler went 100% FF by 1990 and GM's Cadillac and Buick brands for the US were entirely FF by 1997. One of the few notable holdouts was Ford's Lincoln Town Car and Lincoln LS.[58]

In the 21th century, as part of the revamp of its design and image,[59] Cadillac did return most of its lineup (sedans, roadsters, crossovers and SUVs) to have rear- and all-wheel-drive, the only exceptions being the front-wheel drive Cadillac BLS (which is not sold in North America)[60] and the Cadillac DTS. Chrysler returned its full-size cars to this layout with the Chrysler 300.[61][62] Ford's Lincoln retained the longtime FR platform for the Town Car, intended for use as a limousine and chauffeured car,[63] but newer offerings such as the MKZ and MKS will use newer FF platforms shared with mainstream Ford vehicles, with all-wheel drive as an option.[64]

History and sales

Rolls-Royce Phantom II Continental is a British luxury car.

In the United States luxury market, Cadillac and Lincoln had been long the best-selling and second best-selling luxury brands until 1998, when they had been overtaken by Japanese and German brands.[65] Since the 2000s, with the Cadillac CTS, the marque has seen a resurgence in sales and brand value.[66] Ford's Lincoln, which had seen sales fall as a result of an aging lineup, has attempted to return that luxury marque to competitiveness, by releasing new models such as the Lincoln MKS, as well as divesting itself of its other Premier Automotive Group brands.[67] Mercedes-Benz and BMW were the top-selling luxury import until 1991, when they were overtaken by Lexus.[68] Since 2000, Lexus has been the number-one-selling luxury car marque in the U.S., holding that title ever since.[69][70]

Since the 1980s, a host of new manufacturers have entered the luxury market to challenge the traditional players.[71] The three major Japanese auto manufacturers, Honda, Toyota, and Nissan, created their respective luxury brands particularly for the US. As a result of voluntary export restraints imposed in 1981, these manufacturers were limited to a number of vehicles they could export. While these companies did somewhat sidestep this by establishing US production facilities for mass market vehicles, their home factories soon begun producing higher-priced cars as they carried a greater profit margin per car. Acura was launched in 1986, while Lexus and Infiniti were unveiled in 1989. By 1992, these three divisions had sales of over US $3.5 billion, using lower prices and innovation to steal market share from both domestic (Cadillac, Lincoln) and the European (Mercedes, Volvo, BMW, and Jaguar) luxury car makers.[72] Hyundai had recently released the Genesis and plans to launch the Equus, hoping to repeat the same strategy of undercutting their established competitors. [71]

The Late-2000s recession was the first time since the Great Depression of the 1930s that the luxury car market suffered considerably, something not seen in previous economic downturns. Many such customers had seen their net worth decline following the collapse in financial markets and real-estate values.[52][73] For instance, some of the steepest dropoffs had come at the high end, including the BMW 7 Series and Rolls Royce Phantom, and Mercedes-Benz had unexpectedly dropped starting price of its all-new 2010 E-Class. The unusually sharp decline in luxury car sales have led observers to believe that there is a fundamental shift and reshaping of the luxury automotive market, with one industry official suggesting that the marques no longer command the premiums that they used to, and another saying that conspicuous consumption was no longer attractive in poor economic conditions. [71] Additionally, mainstream brands have been able to offer amenities and devices such as leather, wood, and anti-lock brakes, previously found only on luxury cars, as the costs decline. [71]

However, luxury vehicle sales have not collapsed as much as their non-luxury counterparts.[74][75] Luxury vehicle marques generally benefited from financially healthier dealerships, better leasing and certified pre-owned programs and loyal customers, so sales are expected to rebound more quickly than mass market cars. [52] Others note that there is growing interest in luxury vehicles from emerging markets such as China and Russia. [71] Also, the entry-level luxury segment has been very competitive, and there has been price-overlapping with well-equipped non-luxury cars.[76][77] For instance, in Canada, several luxury manufacturers set sales records in August 2009, due mostly to aggressive incentives on entry-level luxury vehicles.[22][78] In September 2009, BMW, Mercedes-Benz, Lexus and Audi all saw their Canadian sales increase by more than 10 per cent compared to a year earlier, despite overall Canadian auto sales being down 3.5 per cent compared to September 2008. The head of Mercedes-Benz Canada suggested that the brand "has been able to attract 'middle-class' consumers even during the recession because of the sense that owning a Mercedes comes with 'membership in a club'." BMW Canada's chief said luxury cars continued to be attractive, "I think due to new product offensives and due to new design and due to the fact that we are the benchmark in all areas when it comes to fuel efficiency... that together stimulates a lot of the market".[79] BMW has managed to remain profitable in 2009 while other competitors were posting losses, by scaling down production quickly to avoid cash burn through bloated inventories. [80]

Since March 2010, BMW is the best-selling luxury vehicle manufacturer by sales, ahead of rivals Audi AG (NSU.XE) and Daimler AG's (DAI.XE) Mercedes-Benz marque. [80][81]

See also

Car market segments and legal classifications
Euro Car Segment[82] Euro NCAP Class US EPA
Size Class[83]		 Other common
segment terms		 Examples
Quadricycle — — Microcar
Bubble car		 Bond Bug, Smart ForTwo, Isetta,
Mega City, Renault Twizy
A-segment mini cars Supermini Minicompact City car
Kei car (JP)		 Chevrolet Spark, Fiat 500, Kia Picanto,
Suzuki Alto, Renault Twingo
B-segment small cars Subcompact — Ford Fiesta, Kia Rio, Opel Corsa,
Peugeot 208, Volkswagen Polo
C-segment medium cars Small family car Compact — Honda Civic, Hyundai Elantra, Ford Focus,
Toyota Corolla, Volkswagen Golf
Subcompact executive Acura ILX, Audi A3, BMW 1 Series,
Lexus CT, Mercedes-Benz A-Class
D-segment large cars Large family car Mid-size — Ford Mondeo, Toyota Camry, Peugeot 508,
Mazda6, Volkswagen Passat
Compact executive (U.K.)
Entry-level luxury (U.S.)		 Alfa Romeo Giulia, Audi A4, BMW 3 Series,
Lexus IS, Mercedes-Benz C-Class
E-segment executive cars Executive Large Full-size car (U.S.) Chevrolet Impala, Chrysler 300, Ford Taurus,
Holden Caprice, Toyota Avalon
Mid-size luxury (U.S.) Audi A6, BMW 5 Series, Cadillac CT5,
Mercedes-Benz E-Class, Tesla Model S
F-segment luxury cars — Full-size luxury (U.S.)
Luxury saloon (U.K.)		 Genesis G90, BMW 7 Series, Jaguar XJ,
Mercedes-Benz S-Class, Porsche Panamera
S-segment sports coupés — — Supercar Bugatti Chiron, LaFerrari, Lamborghini Aventador,
Pagani Huayra, Porsche 918 Spyder
— — Convertible Chevrolet Camaro, Mercedes-Benz CLK,
Volvo C70, Volkswagen Eos, Opel Cascada
Roadster sports Two-seater Roadster
Sports car		 BMW Z4, Lotus Elise, Mazda MX-5,
Porsche Boxster, Mercedes-Benz SLK
M-segment multi purpose cars Small MPV Minivan Mini MPV Citroën C3 Picasso, Kia Venga, Ford B-Max,
Opel Meriva, Fiat 500L
Compact MPV Chevrolet Orlando, Ford C-Max, Suzuki Ertiga,
Renault Scénic, Volkswagen Touran
Large MPV People mover (AU) Chrysler Pacifica (RU), Kia Carnival, Renault Espace,
Toyota Sienna, Citroën C4 Grand Picasso
J-segment sport utility cars Small off-road 4x4 Small SUV Mini 4x4 (U.K.)
Mini SUV (U.S.)		 Daihatsu Terios, Ford EcoSport, Jeep Renegade,
Peugeot 2008, Suzuki Jimny
Compact 4x4 (U.K.)
Compact SUV		 Tesla Model Y, Toyota RAV4, Ford Escape,
Honda CR-V, Kia Sportage
Large off-road 4x4 Standard SUV Large 4x4 (U.K., AU)
Mid-size SUV (U.S.)		 Ford Edge, Hyundai Santa Fe, Jeep Grand Cherokee,
Volkswagen Touareg, Volvo XC90
Full-size SUV (U.S.)
Large 4x4 (U.K.)
Upper Large SUV (AU)		 Lincoln Navigator, Range Rover, Chevrolet Suburban,
Toyota Land Cruiser, Mercedes-Benz GLS


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  83. ^ 40 CFR 600.315-08

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