New luxury products conquest non-luxury owners

23 Jul 2014 Tom Libby

One of the most competitive parts of the U.S. new vehicle market is the lower end of the luxury space, where the Mercedes-Benz CLA-Class, Audi A3 sedan and BMW 320 all serve as gateways, at least on the car side, from the non-luxury makes up to the prestige brands. An IHS Automotive analysis of Polk new vehicle registration data indicates that the CLA-Class and A3 sedan are both succeeding in this effort as both appear on the list of models most likely to conquest non-luxury drivers. But they are not alone, and actually not at the top of the list. Among the ten premium models most likely to conquest non-luxury owners, the Volvo C70 ranks number one with more than two thirds of its conquests coming from non-luxury makes, followed by the JX and ILX (see table below). Nine of the ten models on this list are entry-level models based on price and/or size, but the Infiniti JX is a midsize crossover slotted above the EX. This situation speaks to the relative weakness of the EX, which will soon be replaced.

At the other end of the spectrum, the list of luxury models with the fewest percentage of non-luxury conquests indicates that Mercedes-Benz and BMW remain strong premium makes; each has three models on this top ten list. Note that only one of every ten S-Class conquests is from a non-luxury make, the lowest rate of any luxury model. Also note the overall difference in brand composition between the two lists, with the stronger luxury makes with broad product portfolios dominating the list of makes with low non-luxury conquests.

The fact that some luxury models are pulling more than half of their conquests from non-luxury makes suggests the line between luxury and non-luxury is blurry at best. As more luxury makes join Mercedes-Benz, BMW and Audi in the entry-level arena, and as mainstream makes continue to offer sophisticated products at the top of their portfolios, the division between luxury and non-luxury may fade even more.

Ten Models with Highest Conquests from Non-Luxury Segments

Ten Models with Lowest Conquests
from Non-Luxury Segments

% Total Conquests% Total Conquests
Volvo C7068.01%Porsche 91118.86%
Infiniti JX3563.89%Porsche Panamera18.19%
Acura ILX59.66%BMW 55017.76%
Audi A357.34%Land Rover Range Rover16.52%
Cadillac ATS56.88%Mercedes-Benz CLS-Class15.81%
Acura RDX56.53%Lexus LS15.45%
BMW 12853.93%BMW 64014.97%
Lexus CT200H53.17%BMW 75014.91%
Land Rover LR252.47%Mercedes-Benz SL-Class14.03%
Mercedes-Benz CLA-Class51.83%Mercedes-Benz S-Class10.35%

Note: Models with less than 100 non-luxury conquests were excluded
Source: IHS Automotive (Polk new vehicle registration data, household loyalty methodology, April 2014 CYTD)

Tom Libby is manager, loyalty practice and industry analysis, IHS Automotive
Posted on July 23, 2014

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