Luxury Brands Facing A Threat They Have No Idea How To Counter

As 2016 gets rolling, luxury auto sales are slowing, incentives are rising and trucks are dominating.

Though U.S. luxury-brand sales dropped 3.5 percent in January, many luxury-brand executives forecast sales increases for the segment in 2016. But they expect growth will slow even as incentives rise.

Those are among several challenges luxury automakers face. Others:

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dumpsty - 2/8/2016 10:31:19 AM

+2 Boost

Echoing the comment after the article: A lot of top trim mainstream vehicles overlap the entry-level luxury segment - for both cars & CUVs. So automakers have to be sensitive to varying consumer tastes which see these loaded mainstream offerings as just as good as similar-sized luxury branded vehicles. And these top-end transaction prices are becoming very luxury-like as well.

Also, automakers do see an definite uptick in demand for SUVs - riding on current low fuel prices - but they don't want to completely commit to focusing only on SUVs b/c fuel prices can spike upwards again in 1-2 years & that'll hurt like 8 years ago. So maintaining a delicate balance is tough I would think as luxury brands revise or introduce new CUVs & SUVs while keeping their popular car models relevant.

dumpsty - 2/8/2016 10:38:37 AM

+2 Boost

...and the truck threat is becoming more real than ever. A few luxury brands can make their own SUVs & trucks in the US just like GM & Ford. They just dont want to get into costly comparison & performance battles that the US public loves. M-B would prefer to quietly produce a mid-size luxury pickup which would appeal to the typical mainstream consumer. The revamped Honda Ridgeline has basically opened the door to this new competition.

MDarringer - 2/8/2016 10:45:50 AM

+1 Boost

The annoying thing is that manufacturers can see inventory rising and instead of cooling off production, they keep on cranking out cars. Cadillac got it right by reducing their production to keep inventory in line.