In 2016, luxury SUVs will outsell luxury cars in the U.S. for the first time, as they are on pace to take a 55% share of the market with more than 12 million sales in the overall luxury segment. Edmunds analysts predict this gap will widen further in 2017 to 60%. It was less than a decade ago that luxury car sales outnumbered luxury SUV sales 2:1.
However, overall sales of luxury vehicles are expected to remain flat in 2016 compared to last year. Nonetheless, SUVs are bringing sales to brands that have been considered niche players. Jaguar and Volvo are enjoying the most gains, based on sales or leases of the Jaguar F-Pace and Volvo XC90.
Jaguar’s overall sales were up more than 81% through Q3 of the year. Volvo’s overall sales rose almost 26%. The F-Pace and XC90 are also helping Jaguar and Volvo attract a significantly higher number of so-called conquest buyers, which in theory has the long-term potential to help diversify a segment that’s long been dominated by a small number of high-volume manufacturers.
This market shift is largely being led by women: 57% of women who bought a luxury vehicle in 2016 bought an SUV, compared to 49% of men. Women are also becoming increasingly more influential in the overall luxury market– this year 40% of luxury vehicles will be sold to women, compared to 36% in 2011.
“Low gas prices, changing consumer tastes and attractive new vehicles are creating the perfect environment for luxury SUV sales to grow,” said Jessica Caldwell, Edmunds executive director of industry analysis. “Given that luxury brand loyalty rates are typically higher than for volume brands, this trend has the potential to affect this vehicle segment for years to come.”
