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Luxury vehicle is a marketing term for a vehicle that provides luxury — pleasant or desirable features beyond strict necessity — at increased expense
The term suggests a vehicle with higher quality equipment, better performance, more precise construction, comfort, higher design, technologically innovative modern, or features that convey an image, brand, status, or prestige, or any other 'discretionary' feature or combination of them. The term is also broad, highly variable and relative. It is a perceptual, conditional and subjective attribute that may be comprehended differently by different people; "what may be luxury for one may be premium for another."
Automobile manufacturers market specific makes and models that are targeted at particular socio-economic classes, and thus "social status came to be associated more with a particular vehicle than ownership of a car per se." Therefore, automakers differentiate among their product lines in "collusion" with the car-buying public. While a high price is the most frequent factor, it is "styling, engineering, and even public opinion which cars had the highest and lowest status associated with them."
Every era in automobile history has had "a group of car marques and models that have been expensive to purchase, due to their alleged superiority of their design and engineering". Aimed at wealthy buyers, such automobiles might be generically termed luxury cars. This term is also used for unique vehicles produced during "an era when luxury was individualistic consideration, and coachwork could be tailored to an owner like a bespoke suit." Although there is considerable literature about specific marques, there is a lack of systematic and scholarly work that "analyzes the luxury car phenomenon itself."
Luxury vehicle makers may either be stand-alone companies in their own right, such as BMW and Mercedes-Benz, or a division/subsidiary of a mass market automaker (e.g., Lexus is part of Toyota).Badge engineering is often used for cost savings, for example, the Lincoln vehicles that are based on Ford platforms or Acura models derived from Honda.
Though widely used, the term luxury is broad and highly variable. It is a perceptual, conditional and subjective attribute and may be understood differently by different people: "What is a luxury car to some... may be 'ordinary' to others."
According to the European Commission, the "luxury vehicle" segment is classified as F-segment. However, the boundaries between the traditional segments are increasingly becoming blurred and diluted as features once exclusive to luxury vehicles become standard equipment on even small cars.
- ACRISS is a code system used by many car rental companies in the US for classifying vehicles (but not brands or marques). The system includes "Luxury" and "Premium" categories.
- Australia: In Australia, for taxation purposes a luxury car is defined as a passenger car whose value exceeds a certain threshold, (see: Luxury Car Tax).
- France: In France the term "voiture de luxe" is used.
- Germany: In Germany the term "Upper class" (German: Oberklasse) is used.
- Russia: Russian markets use the term "representative class vehicle" (автомобиль представительского класса, also translated as "luxury vehicle").
- United States: The Consumer Guide publication uses a categorization that sorts luxury vehicles by size and it acknowledges that there can be considerable price variations within a class; for instance the Lincoln Town Car has a relatively low MSRP (Manufacturer's Suggested Retail Price) compared to the Jaguar XJ, BMW 7 Series, Lexus LS, or Mercedes-Benz S-Class.
R.L. Polk and Company, a global automotive information and marketing firm that provides services to automotive and related industries, has defined the term "super luxury" segment for luxury cars costing more than US$100,000.
This bracket includes the full lineups of Rolls-Royce and Bentley, as - unlike mainstream luxury brands such as Audi, Porsche, BMW, and Mercedes-Benz - these marques do not offer lower-priced, entry-level luxury or mid-luxury cars. As of late 2011, super luxury automakers have been "pledging higher sales and offering ever sexier models" despite the economic uncertainty.
Bentley and Rolls-Royce have recently moved into more affordable price brackets with new models priced considerably lower than their traditional offerings (Bentley Mulsanne and Rolls-Royce Phantom and Maserati Quattroporte). These new cars, the Bentley Flying Spur and Continental GT sister cars and Rolls-Royce Ghost, created what Car and Driver described as the "entry-opulent segment".Bentley, Maybach, and Rolls-Royce vehicles share platforms and derivatives of engines with other luxury brands from their parent auto company, however Rolls-Royce and Bentley are assembled in England (separate from the rest of BMW and Volkswagen Group's production plants) and this 'exclusivity' has helped to make these British marques a sales success. By comparison, Maybachs were built alongside the Mercedes-Benz S-Class which partly explains why they have not fared well in the market and were discontinued in 2012. Furthermore, the Maybach's brand pedigree was virtually unknown outside of Germany unlike its British rivals which have long enjoyed fame worldwide. A Bentley executive was quoted as saying "that the brand’s exclusivity, history and obsessive luxury help to convince customers that a Bentley is worth the price" which is at least twice that of a flagship luxury car from BMW or Mercedes-Benz. Although Rolls-Royce and Bentley have traditionally been considered "as a purveyor of boxy British land yachts", newer offerings such as the Bentley Continental Flying Spur and Bentley Continental GT have "upended the super-premium auto segment, making Bentley for the first time a plausible choice for younger Hollywood and music stars".
Maserati vehicles such as the Maserati Quattroporte have traditionally been priced as ultra-luxury cars, although the new Maserati Ghibli III is intended to compete with high-spec executive cars, such as the Audi S6/S7, BMW 550i and Mercedes-Benz E550/CLS550.
The most expensive variants of flagship cars from Audi, BMW, and Mercedes-Benz are often included here as well. They often feature a longer wheelbase and have V12 engines for great refinement and smoothness,even though contemporary V8 engines can make similar output while being less expensive. While BMW sells far fewer V12-engined 7-Series vehicles than V8 versions, the V12 retains popularity in the US, Brazil, China, and Russia, as well as maintaining the marque's prestige in the luxury vehicle market segment. These trims also feature standard luxury and technology features that would be considered optional on their V8 siblings.
There are ultra-high performance cars from "exotic brands" that also exceed US$100,000, but would not necessarily be categorized as luxury automobiles, such as the sports cars from Ferrari, Lamborghini, and Porsche, although thePorsche Panamera does compete in the high-end luxury/full-size luxury category.
Luxury cars tend to offer a higher degree of comfort than their mainstream counterparts, common amenities include genuine leather upholstery and polished wood or "woodgrain-look" dashboards.Compared to mainstream vehicles, luxury cars have traditionally emphasized comfort and safety. Luxury vehicles are also a status symbol for conspicuous consumption.
Contemporary luxury cars also offer higher performance and better handling, which is often known as sport luxury. However, in Europe, where large-displacement engines are often heavily taxed and many luxury buyers shy away from conspicuous consumption, brands offer buyers the option of removing exterior engine-identifying badges.
Forbes noted that the reputation of luxury marques enables them to continually introduce many new safety technologies and comfort amenities, such as anti-lock brakes, electronic stability control and DVD entertainment systems, long before they trickle down to mass market cars. Numerous "smart car" features were found on luxury cars as early as 2009.
Layout and powertrain
The rear-wheel drive with longitudinal engines (FR) is a common layout of luxury cars. European marques like Mercedes-Benz, BMW, and Jaguar have almost never adopted front-wheel drive and retained a lineup mostly or entirely made up of FR cars. Japanese brands such as Lexus and Infiniti also have predominantly FR lineups. The FR layout, while more expensive than the FF, has been retained by these luxury manufacturers as it allows for higher performance engines (particularly the straight-6, V8, and other engine configurations with more cylinders), better handling, and a smoother ride.
American manufacturers also largely followed the FR for their luxury brands (as well as their mass-market cars of the time). However, due to the Arab Oil Embargo of 1973 and the 1979 fuel crises, began eliminating their FR platforms in favor of the more economical front wheel drive transverse engine layout (FF). Chrysler went 100% FF by 1990 and GM's Cadillac and Buick brands for the US were entirely FF by 1997. One of the few notable holdouts was Ford's Lincoln Town Carand Lincoln LS.
In the 21st century, as part of the revamp of its design and image, Cadillac returned most of its lineup (sedans, roadsters, crossovers and SUVs) to rear- or all-wheel-drive, the only exceptions being the front-wheel drive Cadillac BLS(since discontinued; never sold in North America); Cadillac DTS (also discontinued); the Cadillac XTS (which replaced the DTS); and Cadillac ELR (a plug-in hybrid). Chrysler returned its full-size cars to this layout with the Chrysler 300using shared technologies during the DaimlerChrysler era (Chrysler and Daimler-Benz (the parent company of Mercedes-Benz) co-developed the LX platform currently retained by Fiat Chrysler Automobiles. Ford's Lincoln division retained the longtime FR platform for the Town Car (phased out in 2011 with no direct replacement), intended for use as a limousine and chauffeured car. However, newer offerings such as the MKZ and MKS use newer FF platforms shared with mainstream Ford vehicles, the Ford Fusion and Ford Taurus, respectively, with all-wheel drive as an option.
History and sales
1924 Rolls Royce Silver Ghost
A wide array of European producers made luxury cars, including Rolls-Royce Limited, Bugatti, Delage, Delahaye, and Talbot-Lago made vehicles that are still collectible today. Similarly, the Americans built the Duesenberg, Packard, and Cord luxury models.
1966 Mercedes Benz 600
Germany slowly became an export powerhouse during this period, building on success with the Mercedes-Benz brand, later joined by BMW, which now owns Rolls-Royce Motor Cars, and Volkswagen, which now owns Audi, Bentley, and Lamborghini.
In the United States luxury market, Cadillac and Lincoln Motor Company had long been the best-selling and second best-selling luxury brands until 1998, when they were overtaken by Japanese and German brands. These cars were not relevant in most export markets; they were tailored to the U.S. market - moderate price point luxury vehicles not constrained by gasoline pricing.
Before World War II, France was a leading producer of powerful luxury automobiles. After World War II, the French government used puissance fiscale tax regulations to encourage manufacturers to build cars with small engines, and French motorists to buy them. Since many export markets do not have this same constraint, the French automobile industry has become less relevant as an export power and currently produces no luxury brands.
Italy focused on high end sports cars in the luxury market, such as the Ferrari and Maserati.
Since the 1980s, a host of new manufacturers have entered the luxury market to challenge the traditional players. The three major Japanese auto manufacturers, Honda, Toyota, and Nissan, created their respective luxury brands particularly for the US. As a result of voluntary export restraints imposed in 1981, these manufacturers were limited to a number of vehicles they could export. While these companies sidestepped this by establishing US production facilities for mass market vehicles, their home factories soon begun producing higher-priced cars as they carried a greater profit margin per car. Acura was launched in 1986, while Lexus and Infiniti were unveiled in 1989. By 1992, these three divisions had sales of over US$3.5 billion, using lower prices and innovation to take market share from both domestic (Cadillac, Lincoln) and the European (Mercedes-Benz, Volvo, BMW, Audi and Jaguar) luxury car makers.
Mercedes-Benz and BMW were the top-selling luxury import until 1991, when they were overtaken by Lexus.Since 2000, Lexus has been the number-one-selling luxury car marque in the U.S.
Since the 2000s, with the Cadillac CTS, the marque has seen a resurgence in sales and brand value. Ford's Lincoln, which had seen sales fall as a result of an aging lineup, has attempted to return that luxury marque to competitiveness, by releasing new models such as the Lincoln MKS, as well as divesting itself of its other Premier Automotive Group brands.
Hyundai had recently released the Genesis and the Equus, hoping to repeat the same strategy of undercutting their established competitors.
The Late-2000s recession was the first time since the Great Depression of the 1930s that the luxury car market suffered considerably, something not seen in previous economic downturns. Many such customers saw their net worth decline following the collapse in financial markets and real-estate values. For example, some of the steepest dropoffs came at the high end, including the BMW 7 Series and Rolls-Royce Phantom, and Mercedes-Benz unexpectedly dropped the starting price of its all-new 2010 E-Class. The unusually sharp decline in luxury car sales have led observers to believe that there is a fundamental shift and reshaping of the luxury automotive market, with one industry official suggesting that the marques no longer command the premiums that they used to, and another saying that conspicuous consumption was no longer attractive in poor economic conditions. Additionally, mainstream brands have been able to offer amenities and devices such as leather, wood, and anti-lock brakes, previously found only on luxury cars, as the costs decline.
However, luxury vehicle sales have not collapsed as much as their non-luxury counterparts. Luxury vehicle marques generally benefited from financially healthier dealerships, better leasing and certified pre-owned programs and loyal customers, so sales are expected to rebound more quickly than mass market cars. Others note that there is growing interest in luxury vehicles from emerging markets such as China and Russia.
The entry-level luxury segment has been very competitive, and there has been price-overlapping with well-equipped non-luxury cars. For example, in Canada, several luxury manufacturers set sales records in August 2009, due mostly to aggressive incentives on entry-level luxury vehicles. In September 2009, BMW, Mercedes-Benz, Lexus and Audi all saw their Canadian sales increase by more than 10 per cent compared to a year earlier, despite overall Canadian auto sales being down 3.5 per cent compared to September 2008. The head of Mercedes-Benz Canada suggested that the brand "has been able to attract 'middle-class' consumers even during the recession because of the sense that owning a Mercedes-Benz comes with 'membership in a club'." BMW Canada's chief said luxury cars continued to be attractive, "I think due to new product offensives and due to new design and due to the fact that we are the benchmark in all areas when it comes to fuel efficiency... that together stimulates a lot of the market". BMW has managed to remain profitable in 2009 while other competitors were posting losses, by scaling down production quickly to avoid cash burn through bloated inventories.
1968 Rolls Royce Silver Shadow See video for more