RISE IN THE USE OF LUXURY VEHICLES
In the next couple of years, the leading manufacturers of premium passenger cars and crossovers expect to see a major growth in the sales of luxury cars. The current global trend for light vehicles is likely to continue, with sales expected to increase from 88 million units in 2015 to 107 million units by 2022, with an increase of 22%. However, the global demand for premium brands, like BMW and Mercedes-Benz from Europe; Cadillac and Lincoln from North America; and Lexus, Acura, and Infiniti from Japan, is expected to grow faster, rising up to 28% from 8.9 million units in 2015 to 11.4 million units by 2022.
The luxury vehicles segment is expected to register high growth, owing to vehicle OEMs capitalizing on the strength of their brands, by providing a more diverse range of products. Various luxury car manufacturers are interested in increasing their revenues and tapping into new segments. Crossover vehicles that are built on a passenger car chassis and provide sports utility features are a popular choice, as customers often seek the prestige and refinement associated with luxury vehicles, along with a broader range of vehicle dimensions.
ORIGINAL EQUIPMENT MANUFACTURERS (OEM) NEED TO UPGRADE THE LUXURY VEHICLES SEGMENT
The upcoming luxury vehicles are expected to be driven by features such as autonomous, connected, electric, and shared (ACES) mobility trend. Luxury OEMs need to upgrade the customer retail experience and adopt connectivity and human-machine interface (HMI) innovations to distinguish their brands and rethink their car designs, in order to enhance the in-car customer experience. The luxury electric vehicles are also expected to grow from 130,000 units to 1.8 million units by 2025. Plug-in hybrid EVs (PHEV) is expected to hold a significant market share, although long-range, battery-only EVs (BEV) is seen as a growing trend. Similarly, autonomous driving functions will unlock inductive charging functions for the optimal operation of the car, and the first application is expected to arrive in luxury electric vehicles by 2019.Speak to our Research Analyst to know more about the Market Dynamics
The overall strength of the luxury car market is good news for vehicle consumers at all stages. The high premium on such vehicles and demand from consumers for innovation means that producers have the funds and the motivation to invest majorly in product development.
Gradually, these innovations tend to cascade down into more affordable vehicles, increasing overall quality. For instance, the common use of carbon fiber in vehicles was once a hallmark of luxury products. Carbon fiber can be used in all kinds of vehicle components, including body panels, as it is lightweight and durable in nature. Manufacturers, such as Lexus or Infiniti, often bring applications or materials into their premium offering, and then later in the life cycle introduce them in their more regular vehicle offerings.
About the Luxury Car Market
The global luxury car market is expected to register a CAGR of ~7.2% (in terms of revenue) by the end of 2023.
Mordor Intelligence is a market intelligence and advisory firm, operating in 14 industry segments, serving over 600 clients, worldwide.