When you go out on the road, what types of luxury vehicles do you typically see? Based on 2016 data, you probably saw something German or Japanese and maybe an American brand. In terms of luxury, the German’s dominate the luxury car market in the U.S. In 2016, German brands (Mercedes, BMW and Audi) accounted for 41.6% of the luxury car market share. Japanese brands (Lexus, Acura, Infinity) accounted for 32.8%. Where did the American automakers clock in at? Between Cadillac and Lincoln, the market share came in at 13.6%.
We see vehicles all the time, yet it’s not often we think about where certain countries dominate. Clearly, in the luxury segment German and Japanese automakers exude dominance.
The more interesting thought to ponder about the luxury car market is the entire question of what constitutes a luxury vehicle. The lines that once existed have blurred considerably. If you look at the new Honda Accord, between its features and styling, the sport and touring editions look and feel like luxury sedans. The same holds true in countless other examples.
I believe this blurring of divisions has resulted through a significant amount of progress in technology and vehicle production in the last 30 years. The cycle time to introduce a new feature or concept in vehicle production and the dissemination down to lower rung vehicles has diminished. Take airbags for example. In the early 1980’s airbags existed in high end luxury automobiles, such as Mercedes. It took until 1989 for driver airbags to become a standard feature in cars and not until 1997 to become a requirement in trucks.
Today’s vehicles and the introduction of technology is a mixed bag. Some visible improvements in safety have developed, while the development of features addressing convenience and comfort has exploded. These convenience and comfort features have quickly trickled down from luxury to entry level. A classic example of items that have been considered ‘standard’ for a number of years now are Bluetooth connectivity and USB ports. Both features are a luxury, though they are considered standard today.
Though we still know what constitutes the luxury vehicle segment in the U.S., it’s becoming easier by the year to find vehicles outside the segment that have comparable features. The speed of progress has leveled the peaks and raised the valleys of automotive disparity.