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Customer LoginsOne fundamental advantage for BMW, Lexus and Mercedes-Benz
Discussions about aspirational luxury makes almost always include at some point a mention of BMW, Lexus and Mercedes-Benz. It is not a coincidence that these same three makes (and Jaguar) have at least one entry in both the very high-price, and low-volume, luxury car segments: the Large Premium Sedan and Large Premium Sport Segments. In fact, both BMW and Mercedes-Benz have multiple models in one or both of these segments. It is also not a coincidence that several luxury makes striving to attain the image of BMW, Lexus and Mercedes-Benz are not represented in either segment. These "near-luxuries" include Volvo, Saab, Acura, Infiniti, Cadillac and Lincoln. Audi falls somewhere in the middle, as it is represented in the Large Premium Sport Segment with the R8 and in the Large Premium Sedan Segment with the A8/S8, but the latter has struggled and is currently selling at a far lower rate than any of its German competitors.
Together these two segments now account for less than 1% of the U.S. retail new vehicle market, but having a product in these categories is invaluable. Each large premium sedan or sport car on U.S. roads lends its respective make an aura of true luxury and exclusivity that a lower-end model can't generate. Don't look for any of these high-price models to be discontinued any time soon, even if volume drops further (unless the brand itself is in serious trouble). Lastly, when one of the "near-luxury" brands is able to successfully market a vehicle in one of these segments, that marque will have genuinely "arrived" in the luxury market.
Posted by Tom Libby, PolkInsight Advisor, Polk (07.30.2010)