Sales of luxury cars and trucks will hit an all-time high this year as consumers continue to soak them up.
Luxury sales based on WardsAuto’s segmentation were up 7.1% year-to-date through July, totaling 1.15 million units. Taking into account that the latter part of the year is the best time for luxury-vehicle demand, and has shifted that way even more so in recent years, the segment is forecast to finish 2014 at 2.1 million units, well above the current best of 2.043 million in 2003.
The sector's market penetration also will reach a new peak: 12.9% of total light-vehicle sales, vs. last year’s record 12.7% and 2003’s 12.3%.
Not surprisingly in today’s market, trucks are the volume pushers, but giving support in 2014 are Middle Luxury sedans, as well as the sports and specialty segments driven by such cars as the BMW 4-Series, Chevrolet Corvette, Jaguar F-Type and Infiniti Q60.
Sales of the least-pricey luxury-car segment, Lower Luxury, are down 9.1% so far this year, despite some big gainers over year-ago, such as the Kia Cadenza and Lexus IS. But Lower Luxury volume likely will fare better with year-ago comparisons in Q4 when a redesigned version of the Mercedes C-Class hits the market.
Also not surprising is that a lot of volume that will push luxury sales to an all-time high is from entirely new vehicles or those that have undergone a redesign or major freshening within the last couple years. Luxury-vehicle buyers often are the most sensitive to new products, compared with the rest of the market.
Based on history, it is not surprising luxury sales are heading for a record. The upward movement in luxury penetration has been ongoing since at least 1980, when LV share was 4.8%. Luxury penetration, with some hiccups along the way, has risen consistently over the past 34 years.
Since the mid-1990s, growth has centered on trucks, and it will mostly be trucks that carry the combined luxury segments the rest of the year to a new record.
Over half of luxury-vehicle sales occur in the second half of most years. Since coming out of the recession in 2009, an average of 53.6% of annual luxury volume accrued during the July-December period.
For luxury trucks, the second-half average has been 54.5% over the last five years.
The vehicles will get a good goosing for the remainder of the year, with several new models rolling out now, including the BMW X4, Cadillac Escalade and Escalade ESV, Lincoln MKC and Porsche Macan. Coming later in the year are the new Audi Q3 and Mercedes GLA Small Luxury CUVs - a tiny but growing segment of the luxury market - and the redesigned BMW X6.
Trucks have accounted for over 40% of luxury-vehicle sales in three of the past four years, and this year are in line to account for 42% of demand – also a record.