Shop for a luxury vehicle and your eyes may feast upon the Mercedes-Benz E350 sedan, BMW’s X5 xDrive35i crossover or the Lexus RCF sports car. Each high-end model sells for more than $50,000, a price point that demonstrates mass-produced luxury at its finest.
The Best Selling Luxury Models
As much as consumers are demonstrating interest in luxury vehicles from Europe, Asia and North America, these models do not dominate the premium segment or what represents vehicles with transaction prices above $50,000. According to TrueCar, Inc. — a car buying and selling platform — six of the top 10 best selling models are premium pickup trucks and sport utility vehicles sold by non-premium brands, including Ford, Ram, GMC and Chevrolet.
Indeed, TrueCar says that Ford will sell approximately 189,776 units of its popular F-Series pickup truck this year with a transaction price exceeding $50,000. That’s out of more than 700,000 overall units for its best-selling model, outpacing sales for several luxury brands, including Audi and Cadillac.
“Conventional wisdom says German premium brands would dominate the list of top-selling vehicles over $50,000,” said John Krafcik, president of TrueCar. “The reality is that this price segment of the market is dominated by American pickups and SUVs sold through non-premium brand dealers.”
High-end interiors as found in this GMC Sierra Denali are the
hallmark of pickup trucks with high transaction prices.
Improving Economy, Rising Consumer Demand
TrueCar identifies several reasons for interest in luxury trucks and SUVs. For one, the US economy has been showing steady improvement, with housing starts on the rise and fuel prices falling. Fuel prices have tumbled dramatically this year and are expected to stay well below recent highs for several years. More money in consumer pockets and lower operating costs may continue to shift customers to larger and more luxurious vehicles such at the Ram Laramie Longhorn and the GMC Yukon Denali.
Industry volume continues to rise and with that comes rising demand for more luxurious vehicles. For 2014, TrueCar estimates that about 8.1 percent of the market will be for cars and trucks costing consumers at least $50,000, a huge jump from the 6.6 percent in 2013. The company’s data reveals that the average transaction price for new vehicles this year is $31,831 with industry sales growing by 5.4 percent.
Ford F-150 Transaction Prices
While Ford is busy resurrecting its premium Lincoln brand, the company’s big money has long come from its line of full-sized pickup trucks. Total transaction prices for its best-seller will bring in an estimated $10.8 billion this year and $32.2 billion for the entire line.
The second best selling luxury pickup truck line is not from GMC, Toyota or Chevrolet, but from Ram, a Fiat Chrysler division. This year, Ram should sell an estimated 76,266 units of its 1500 Series with a transaction price of at least $50,000. That number exceeds the estimated 67,006 units for the Mercedes-Benz E-Class, widely recognized at the benchmark model for the luxury segment.
Other top performers include the Chevrolet Tahoe, Chevrolet Silverado, Chevrolet Suburban and the GMC Sierra. Two Mercedes-Benz and two BMW models are also among the top 10 vehicles with transaction prices exceeding $50,000 (see chart).
New Premium Price Benchmark
Krafcik, the former CEO of Hyundai Motor America, noted that the $30,000 threshold was once the demarcation line for premium vehicles only. Today, that mark is at $50,000 and is one well served by the likes of the Ford Expedition, Chevrolet Tahoe and even the Jeep Grand Cherokee Summit.
Chart courtesy of TrueCar, Inc. Photos copyright Auto Trends Magazine.