With no retreat in the luxury market's shift to crossovers and SUVs, the two biggest luxury players are adding more light-truck models, and this year they expect cars to account for less than half of their U.S. sales for the first time.
That tipping point to trucks for Mercedes-Benz and BMW has been a long time coming. While the overall U.S. light-vehicle market went majority-truck in 2002, luxury brands — anchored by flagship sedans — were dominated by cars for much longer. The luxury segment finally crossed over to truck dominance in 2016, but the top German brands continued to rely more on cars.
For them, "a flagship luxury vehicle is still a sedan," said Rebecca Lindland, executive analyst at Kelley Blue Book. "It's still an S class, it's still the 7 series, and, for Audi, it's the A8. So investing and migrating away from that tenet is really hard for them. It's something that goes against their roots."
The decades spent by the German luxury makers building up the aura of their flagship sedans helps explain why those companies have been slower to capitalize on the crossover and SUV boom.
"Let's not forget: We have some very, very strong and successful cars," Mercedes-Benz USA CEO Dietmar Exler said in an interview. But even with compelling sedans, coupes and convertibles, the car side of the U.S. luxury business has faced a "difficult environment," Exler acknowledged.
U.S. sales of the S class dropped 16 percent in 2017. Mercedes sold 15,888 S classes last year, nearly half what it sold in 2006.