Sales of luxury sport-utility vehicles are on track to post near-record numbers this year, as high-end brands quickly expand their SUV lineups to satisfy demand.
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The industry has sold 1.3 million new luxury vehicles in the U.S. through the first eight months of 2018, or 11.4 percent of all new-vehicle sales, according to a new report from Edmunds. Analysts at the car-shopping website said luxury makes have SUVs to thank. SUVs have accounted for 62 percent of luxury, an all-time high.
“Car buyers are willing to consider an SUV in pretty much any form they can get them, and the premium price tags SUVs command make for nice profit engines for automakers,” Jeremy Acevedo, manager of industry analysis at Edmunds, said in a news release. “However, the flood of SUVs in the market is also driving up prices of new vehicles overall, blurring the lines in the eyes of car shoppers of what ‘luxury’ really means.”
Edmunds found that the price gap between luxury and mainstream vehicles has narrowed to 48 percent from 58 percent in the past 10 years. The report also noted that consumers’ migration to SUVs has helped close the price gap. The average luxury midsize car sells for 107 percent more than a mainstream one. Meanwhile, a luxury midsize SUV sells for only 48 percent more.
The competition to win over buyers is heating up with luxury brands launching several new SUV models this year. The Audi Q3, Cadillac XT4 and Lincoln Nautilus are due to arrive in U.S. showrooms this year as 2019 models. Jaguar has already begun selling the E-PACE, a new small SUV that starts at $39,595 including destination charges.