Luxury brands raced out of the gates in the first quarter, a time of year when they typically underperform following their seasonal year-end marketing programs.
Overall, U.S. luxury sales rose 20 percent to 547,903 cars and light trucks in the quarter, significantly outperforming the broader industry's 12 percent increase. With the premium surge, the annualized light-vehicle sales pace in March jumped to 18.1 million, according to Motor Intelligence.
The luxury sector's share of industry retail sales climbed to 15.2 percent, a record for the first quarter dating back at least to the start of this century, noted Tyson Jominy, vice president of the Power Information Network at J.D. Power.
Luxury retail sales rose 37 percent for the quarter, Jominy said. But the segment is evolving from its past, when it was once a stronghold of leasing activity. Leasing fell 8 percentage points in the quarter to 49 percent, extending a trend that first emerged during the peak of the coronavirus pandemic.
Premium consumers also are proving to be early adopters of new tech. Sales of battery-electric luxury vehicles rose to 14.5 percent of the segment, from 8.9 percent last year, while all types of electrified luxury vehicles rose to 19 percent from 12.25 percent a year earlier.
The luxury-vehicle segment is showing no sign of slowing down, despite the lingering economic effects of the pandemic around the nation.
Mercedes delivered 78,256 vehicles in the quarter, excluding commercial vans, up 16 percent from a year earlier. Crossovers and SUVs accounted for 60 percent of the brand's sales during the first quarter. The midsize GLE crossover led the results, with 16,668 sales, followed by the GLC compact crossover, with sales of 15,569.
At Lexus, strong demand for its hybrid crossovers lifted sales 32 percent to 74,253 vehicles in the first quarter. Lexus sold 27,941 RX midsize crossovers for the period — nearly twice the volume of its next-bestselling model, the NX compact crossover, at 14,462.
BMW sold 71,433 vehicles in the quarter, up 20 percent from a year earlier. BMW's quarterly sales were buoyed by the launch of the new M3 and M4 performance sedans. The brand's X-series utility vehicles accounted for 58 percent of BMW sales in the January- March period.
"Luxury crossovers and SUVs of all sizes are hot," said Michelle Krebs, executive analyst at Autotrader. "Luxury cars, generally, are not."
Despite the robust results, first- quarter sales were dampened by supply issues, caused primarily by the global shortage of microchips.
The luxury sales crown winner this year may end up being the brand with the largest light-truck inventory, Krebs said.
"Selection could become a challenge for consumers," she said. "The question is, will they compromise on features, color, or will they wait for the exact vehicle they want?"
Among other luxury brands, Tesla saw an estimated 25 percent increase in first-quarter sales, delivering 66,000 cars and crossovers.
Audi rounded out the top five, reporting 54,840 sales for the period, up 33 percent from a year earlier.
Genesis more than doubled first-quarter sales to 8,222. Meanwhile, Jaguar suffered the segment's deepest dive, tumbling an estimated 44 percent to 4,046.