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New luxury products conquest non-luxury owners




One of the most competitive parts of the U.S. new vehicle market is the lower end of the luxury space, where the Mercedes-Benz CLA-Class, Audi A3 sedan and BMW 320 all serve as gateways, at least on the car side, from the non-luxury makes up to the prestige brands. An IHS Automotive analysis of Polk new vehicle registration data indicates that the CLA-Class and A3 sedan are both succeeding in this effort as both appear on the list of models most likely to conquest non-luxury drivers. But they are not alone, and actually not at the top of the list. Among the ten premium models most likely to conquest non-luxury owners, the Volvo C70 ranks number one with more than two thirds of its conquests coming from non-luxury makes, followed by the JX and ILX (see table below). Nine of the ten models on this list are entry-level models based on price and/or size, but the Infiniti JX is a midsize crossover slotted above the EX. This situation speaks to the relative weakness of the EX, which will soon be replaced. 

At the other end of the spectrum, the list of luxury models with the fewest percentage of non-luxury conquests indicates that Mercedes-Benz and BMW remain strong premium makes; each has three models on this top ten list. Note that only one of every ten S-Class conquests is from a non-luxury make, the lowest rate of any luxury model. Also note the overall difference in brand composition between the two lists, with the stronger luxury makes with broad product portfolios dominating the list of makes with low non-luxury conquests.

The fact that some luxury models are pulling more than half of their conquests from non-luxury makes suggests the line between luxury and non-luxury is blurry at best. As more luxury makes join Mercedes-Benz, BMW and Audi in the entry-level arena, and as mainstream makes continue to offer sophisticated products at the top of their portfolios, the division between luxury and non-luxury may fade even more.

Ten Models with Highest Conquests from Non-Luxury Segments

 

Ten Models with Lowest Conquests
from Non-Luxury Segments

  % Total Conquests   % Total Conquests
Volvo C70 68.01%   Porsche 911 18.86%
Infiniti JX35 63.89% Porsche Panamera 18.19%
Acura ILX 59.66% BMW 550 17.76%
Audi A3 57.34% Land Rover Range Rover 16.52%
Cadillac ATS 56.88% Mercedes-Benz CLS-Class 15.81%
Acura RDX 56.53% Lexus LS 15.45%
BMW 128 53.93% BMW 640 14.97%
Lexus CT200H 53.17% BMW 750 14.91%
Land Rover LR2 52.47% Mercedes-Benz SL-Class 14.03%
Mercedes-Benz CLA-Class 51.83% Mercedes-Benz S-Class 10.35%

Note: Models with less than 100 non-luxury conquests were excluded
Source: IHS Automotive (Polk new vehicle registration data, household loyalty methodology, April 2014 CYTD)

Tom Libby is manager, loyalty practice and industry analysis, IHS Automotive
Posted on July 23, 2014

About The Author

Tom currently uses his passion for the auto industry to serve as a Solutions Consultant for IHS Automotive's Loyalty Practice. His past roles here include Sr. Forecasting Analyst and PolkInsight Advisor (he worked for two years in Polk’s Woodcliff Lake, New Jersey office). Tom's other interests include reading, gardening, sailing and running. Aside from Detroit and New York, Tom has also lived in Los Angeles, Denver, and Boston, where he drove a taxi for two years. Tom has also traveled extensively in the United States and overseas, including an overland trip across Asia after graduating from college. Tom is inspired by people who practice what they preach and enjoys socializing with friends that he's met throughout his career and from school.

Tom is a past member of the Board of Directors of the Society of Automotive Analysts (SAA). During the 2009 calendar year, Tom was President of that organization. He is an active member of the Automotive Press Association, and in the past has written a blog for the online version of the Detroit Free Press. Tom has a bachelor's degree in history from Amherst College, an MBA with a marketing concentration from Columbia University and once served as an Adjunct Professor of Market Research at Pepperdine University in Malibu, California.


Comments

Name: mark
Time: Monday, July 28, 2014

How many of the Acura and Infiniti conquests are from their non-luxury parent companies, Honda and Nissan?


Name: Rex
Time: Thursday, August 14, 2014

Mark raises the next question. Where are these conquests coming from? Are they moving up buyers from their parent brands and/or pulling from other brands?



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