Luxury automakers are readying a slew of new or redesigned vehicles to reach baby boomers in their peak earning years and young, upwardly mobile buyers. Several brands, including Cadillac and Lincoln, have dual-product strategies to retain older buyers while they reposition themselves as more hip with new vehicles for young, affluent motorists.
The upper end of the luxury segment is showing more weakness than the lower end, says Susan Jacobs, president of auto consulting firm Jacobs & Associates in Rutherford, N.J.
New low-end models in the segment have sold well, Jacobs says. But marketers with new entry-level luxury cars this year, including Cadillac with its CTS sedan and Infiniti with the G35 sports sedan, may have to decide whether they can live with smaller sales volumes this year or move to incentives. She says both marques have been trying to move away from incentives to build their brand images.
Unit sales in the luxury sedan segment will shrink 2.3 percent this year, and sales of upscale trucks will rise as much as 6 percent, predicts CNW Marketing/Research in Bandon, Ore.
Art Spinella, a CNW vice president, warns that upscale marketers such as Jaguar Cars North America and Mercedes-Benz USA Inc., aiming for younger buyers with entry-level vehicles could hurt their exclusive brand images. Both brands have added entry-level models in recent years to woo younger buyers and increase sales. Through February, Mercedes entry-level C-class models represented 39 percent of all Mercedes cars sold, up from 29 percent during the same period last year. Top-of-the-line Mercedes S-class sales were down 33 percent.
CNW's annual surveys ask new-vehicle intenders what they would like to own eventually.
Mercedes remained the most-wanted luxury brand in the 2001 survey, with a 9.2 score out of a possible 10. But its score has hovered in that range since 1990, Spinella says.
Lexus rose from 6.5 in 1990 to 7.7 last year. BMW of North America LLC also has made gains as an aspirational brand. BMW rose from 6.1 in 1990 to 7.6 last year.
Cadillac's score rose from 4.1 in 1990 to 6.3 last year. Spinella says Cadillac's scores have improved with the 1999 arrival of the Escalade sport-utility.
Mark LaNeve, general marketing manager at Cadillac, says new models with bold styling return the marque to "our brand essence, our DNA."
Lincoln has a big year planned. The brand will launch the second-generation sport-utility and reskinned 2003 Town Car sedan in May; the new mid-sized Aviator sport-utility, which is aimed at younger drivers, this summer; and the 2003 LS sedan this fall. All will use the new tag line "Travel well with Lincoln."
Richard Beattie, vice president of marketing, sales and service at Lincoln Mercury, says 60 percent of Navigator buyers are new to the Lincoln brand, as are 70 percent of LS buyers.
Says Beattie: "Our near-term strategy is set: invest in the Town Car to retain our loyal customers; refine the Navigator and LS to sustain our new customers; and nourish the brand with new products such as the Aviator."