Small Luxury SUVs Steal the Show in the First Half of 2017 | Edmunds

Small Luxury SUVs Steal the Show in the First Half of 2017

For the first time ever, sales of compact and subcompact SUVs made up more than half of the luxury vehicles sold during the first five months of the year, according to the latest Luxury Market Report from Edmunds.

Sales of smaller luxury SUVs and crossovers helped brands such as Audi, Infiniti and Jaguar grab market share from traditional luxury competitors such as BMW, Lexus and Mercedes-Benz. Through the end of May, Jaguar's sales were up 115 percent, Infiniti's were up 24 percent and Audi's rose by 6 percent, with help from such compact models as the 2017 Audi Q5, 2017 Infiniti QX50 and 2017 Jaguar F-Pace.

"When the legacy luxury brands first began offering affordable smaller vehicles, it was seen as a risk to their brand image, but they were quickly rewarded with new customers and growing sales," said Jessica Caldwell, Edmunds executive director of industry analysis. "But now as the smaller luxury brands also start to diversify their lineups and introduce SUVs that appeal to a broader audience, the major brands are confronted with a real threat."

Sales of luxury SUVs of all sizes have been a major factor in helping shore up automakers in a moderately declining market. Consumers backed off luxury car models in the first half of 2017, resulting in a 6 percent drop in sales. Meanwhile, the best-selling models for 10 of 14 luxury manufacturers during the same period were SUVs, for a 7 percent overall increase.

A large part of the appeal of luxury brands is their technology-heavy list of standard and optional features. Luxury vehicles are generally the first models to get the latest advanced driver assist, connectivity and safety features, so consumers who want to be at the forefront of automotive technology are gravitating toward these vehicles. Automakers have responded by increasing their offerings.

For example, as the Edmunds report points out, blind-spot monitoring is now available on 81 percent of luxury models, up from 37 percent in 2012. Adaptive cruise control is available on 76 percent of models, compared with 50 percent five years ago.

"Luxury shoppers always want the niche, exclusive choice, and when you offer a product for every price point, that cachet starts to fade," said Caldwell. "But as the industry envisions an autonomous future, the high-end ownership market will start to shift toward vehicles that offer the best and latest autonomous features and technologies. For many buyers, these high-tech features create the exclusivity that defines luxury."

For more insights on the latest trends in the luxury market, read the complete report in theEdmunds Industry Center.

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