A Downshift in Auto Luxury Upsell: 78% of Those Considering Near-Entry Luxury Cars Also Look at Non-Luxury Vehicles


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NEW YORK--December 18, 2012: High-end car makers have long relied on "near-entry" models to upsell standard car buyers into the luxury category. But new data from GfK's Automotive team shows that more than three quarters (78%) of those considering a Near-Entry Luxury car are also looking at non-luxury models, from Upper Middle Sedans (36%), Small Cars (23%), and Lower Middle Sedans (19%).

“It's clear that a significant number of auto shoppers who start out looking at Near-Entry Luxury cars wind up buying in the non-luxury category -- with economic uncertainty and high gas prices likely playing a role.”

To download the full report from this study for free, click here.

In addition, the new study indicates that loyalty to the Near-Entry Luxury category is dropping; only 38% of those who own a car in the category are planning to buy another Near-Entry Luxury vehicle, compared to 43% in 2007. Meanwhile, the rate of switching to a non-luxury model has grown -- 37% in 2012 versus 29% in 2007.

GfK data shows that the Near-Entry Luxury category accounts for just 4% of industry sales, while the Upper Middle, Small Car, and Lower Middle segments combine for 46% of all sales.

"Adding sexier looks to better perceived value for the money and fuel economy has been a winning combination for non-luxury cars," said Jeff Campana, Senior Vice President of GfK Automotive. "It's clear that a significant number of auto shoppers who start out looking at Near-Entry Luxury cars wind up buying in the non-luxury category -- with economic uncertainty and high gas prices likely playing a role."

More than one third (36%) of Near-Entry Luxury intenders are drawn from non-luxury replacers; but while these intenders convert at a rate below 100%, the Lower Middle sedan category grows by about 150% between intention and purchase. Just 7.1% of vehicle intenders are in the Lower Middle category, while 17.5% of auto sales come in that category.

This GfK Automotive study of the Near-Entry Luxury Car category was authored by GfK analysts Pamela Gudenau and Samantha Tridle.

For nearly 30 years, GfK Automotive has been the preeminent provider of product, brand and consumer research and consulting to the global automotive industry. Counting most major Asian, European and North America car makers among their client base, GfK Automotive research consultants deliver integrated information and insights to the automotive community.

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