Manufacturers augmenting profits with super luxury vehicles

(July 6, 2017) LONDON — Wealthy consumers willing to pay for innovative, customizable, high-performance, technologically advanced vehicles are driving the super luxury vehicles market. Growth is augmented by high demand for sport utility vehicles and crossovers that are both practical and luxurious, according to research from Frost & Sullivan.

As super luxury vehicles are more profitable than their mainstream counterparts, original equipment manufacturers are maximizing the use of flagship vehicle platforms by offering state-of-the-art luxury features, infotainment, safety, and driving technologies at a premium price.

"To gain a competitive advantage, OEMs should focus on building vehicles with significant convenience features in addition to maximum customization options," said Frost & Sullivan Mobility research analyst Venkata Balakrishnan.

"Super luxury vehicles are expected to be among the first to feature level 4 autonomous technologies by late 2018 and level 5 by 2020 as customers are eager to pay for advanced features that are unique and luxurious."

From a regional perspective, the United States, Middle East and China sell the most super luxury vehicles, with U.S. manufacturers focusing on electric vehicle technology and European manufacturers looking toward improving passenger comfort and autonomous technology adoption.

Global super luxury vehicle developments and trends driving growth include:

    • High sales in upmarket SUVs and crossover vehicles;

    • The introduction of flagship sedans and SUVs to add to the ultra-luxury sedans and sports cars segments;

    • Launch of electric super luxury segment with Lucid, Fisker, and Faraday Motion ushering in their vehicles by 2019;

    • High profits per vehicle priced above $15,000 due to bespoke customer options;

    • OEM investment in super luxury vehicles by entering new segments such as BMW with the X7, Audi with the Q8, and Porsche with the Mission E;

    • Development of autonomous technology up to level 5 by 2020 to present cars without steering wheels and pedals;

    • High penetration of electrified powertrain by 2020 with more than 50 percent of super luxury brands selling hybrid and electric vehicles.

"Super luxury automakers are focusing on in-vehicle human-machine interaction and artificial intelligence to act as a brain in the connectivity system," noted Balakrishnan. "Virtual cockpits and lounge-style interiors will be possible through autonomous level 5 technology, which will be dependent on AI technology to customize passenger data."