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Wednesday, January 20, 2016

Luxury Cars Still Regaining Ground Years After Recession


Copyright © 2016 Bold Ride LLC.

Roughly 20 cars debuted last week at the 2016 North American International Auto Show. Of those debuts, four were large luxury sedans, a segment that has dropped 15 percent last. Additionally, premium sports cars were also featured and yet down one third last year. The point? Automakers are finally giving attention to certain market segments (like luxury cars) after a time of neglect.
According to Bloomberg, it is all a matter of priority. Following the lean times of the economic downturn and automaker bailouts, when sales finally came back strong, automakers chose to use their resources to develop new versions of their high-volume cars first. With buyers finally coming back into dealerships, there was a rush to ensure the market segments with the highest demand were the ones that received new models first.

2017 Lincoln Continental

The single hottest segment in the new car market is small SUVs, luxury and otherwise. As such, Lincoln put its resources into the all-new MKC, which has been a strong seller for the brand. Volvo rolled out the XC60 crossover in 2009 and Porsche debuted its Macan small SUV for the 2014 model year. Now that the automakers have taken care of the bread-and-butter vehicles, they are branching out to the more lavish ones. Lincoln is debuting the Continental full-size sedan, and Volvo is rolling out the S90 flagship car.
But the Bloomberg report also treats the concept of halo cars like it is a new concept, which is odd. It is certainly a surprise to learn that Lexus is actually going to build the LC 500, but it is not a completely novel idea for a volume-luxury brand to produce a limited-run sports car. A halo car is a top-end sports car or concept that is built to get buyers into dealers to look at other models. Someone might not be able to afford the LC 500, but they might be attracted enough by the beamy sedan to lease an entry-level RC 200t.


The report treats it like this is some sort of new concept, but it still proves an interesting point. Getting buyers into dealerships is a multi-pronged approach, and building the head-turning halo car is just as important as building the high-volume sedans and small SUVS that the consumers will eventually purchase or lease anyways.