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Luxury Brands Make Inroads in 2012 and Ready More Models for U.S. Market

Luxury Brands Make Inroads in 2012 and Ready More Models for U.S. Market

By Jeff Youngs, January 29, 2013
Luxury brand sales in each of the final three months of 2012 increased by double digits from the same last three months in 2011. For calendar 2012, eight major premium brands (Acura, Audi, BMW, Cadillac, Infiniti, Lexus, Mercedes-Benz and Volvo) and niche premium nameplates (Jaguar, Land Rover and Porsche) sold more than 1.6 million units, which accounted for slightly more than 11% of  industry sales.

The luxury sales count was up from 1.4 million units in 2011. Nearly one in 11 cars or light trucks sold last year was a premium model, according to analysis from J.D. Power and Associates and strategic partner LMC Automotive.

BMW had the highest sales rate in 2012 at 281,460 units, up 13.5% from 247,907 units in 2011. For the second year in a row, Mercedes-Benz came in second in the U.S. market, with sales up by 12.7% to 274,050 from 245,173, which does not include the Sprinter Van. Lexus remained the third-best-selling premium brand in 2012, although sales climbed 23% from the previous year when inventories were constrained by setbacks after the March 11 earthquake and tsunami in Japan. Before 2011, Lexus was the best-selling premium brand in the United States for 11 consecutive years.

At the beginning of 2013, luxury brands continue to make news in the U.S. market. Acura, Audi, Bentley, BMW, Cadillac, Infiniti, Lexus, Lincoln, Porsche and Mercedes-Benz all shared introductions of production models or concepts at the 2013 North American International Auto Show in Detroit, Michigan.

German premium brands continue to compete for a larger share of sales, as they offer shoppers with a broader mix of models, including smaller models with smaller engines and better fuel economy. Since Europe is stymied by major economic upheaval and a debt crisis, the German luxury brands want to take advantage of lower interest rates and relatively high consumer confidence levels in the U.S. market.

Volkswagen's upscale brand, Audi,  intends to significantly grow its share in the U.S. premium market. Audi displayed its new 2014 RS 7, which is expensive and full of speed--accomplishing zero to 60 mph in less than 4 seconds. The SQ5 crossover also was shown. Audi hopes to become the luxury sales leader in the United States, which means it will need to double its 2012 sales of 139,310 in 2013 to approach BMW's 281,460 unit sales in 2012. Audi's Chairman Rupert Stadler said in a press conference before the Detroit Auto Show that the brand is the best-selling luxury nameplate in Europe and in China.

More luxury brands are paying attention to introducing new entry-level luxury models. Lexus showed its new compact IS model and Mercedes-Benz revealed its first FWD sedan at the Detroit Auto Show. Mercedes-Benz is also offering an E-Class at a lower price point.  BMW exhibited a new 320i, which is priced about 10% lower than the starting point for the 3 Series. Lincoln plans to revamp its lineup and will add four more models by 2015, including the MKC small crossover. Cadillac was not to be outdone and showed its ELR, which looks a lot like the CTS coupe, but is a premium plug-in hybrid based on the Chevrolet Volt. Infiniti also showed it's new Q50, which replaces the current G37 sedan in the automaker's lineup.

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