Luxury brands going into the SUV market

From the beginning of the course we have known that car manufacturers create larger profits on larger vehicles since they have more added value. This feature of the big trucks, pick-ups, and SUVs was what made the american manufacturers rich before the oil crisis when people started looking at smaller, fuel-efficient vehicles.

Whit the Asian manufacturers taking most of the market share with the small vehicles, American manufacturers had to enter the small vehicle market. Now we see the trends moving the opposite directions, with Japanese brands producing trucks that are now common in the streets of all Americans cities. What is surprising is to see luxury brands starting to produce SUVs; Jaguar, Rolls Royce, Bentley, and even Lamborghini are planning to enter this market, and try to get a portion of the market share that BMW, Audi, and Porsche own over this sector of luxury SUVs.

Does this mean that the market is walking away from the financial crisis and car manufacturers see a great opportunity in the increase in consumer expenditure? Or is it just a change in the preferences of the market that makes people prefer luxury SUV instead of luxury cars? Would this in a way show that oil prices are not high in real terms?

2 comments to Luxury brands going into the SUV market

  • Alexander Dawejko

    Where would the sales of these cars come from? A Rolls Royce SUV would cost three times as much as a Range Rover, which is considered the quintessential “Rich person SUV”. Could these supercar brands sell enough volume to make it profitable?

  • Peter Wittwer

    A main competitor in the market which you’ve forgotten is the Cadillac Escalade. It typically sells anywhere between 50,000-70,000 dollars, and debuted in 1999 and can be credited as the benchmark as well as the car that really created the luxury SUV market. Nonetheless, brands like Audi, BMW, Porsche, Lexus and Cadillac all produce cars that have competitive prices. It would be very hard to believe Lamborghini producing an SUV under 90,000 dollars. The high end luxury brands such as Rolls Royce and Lamborghini have to produce SUV’s that have a similar price range with BMW, Audi, Range Rover, etc. which would require changing up their normal style of production to create more competitively priced cars by cutting costs.

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