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Luxury Auto Market

Automobile manufacturers have long recognized that in their major markets, and in the United States in particular, automobiles are not merely a means of transportation. Consumers purchase cars not only to transport them from one place to another, but to make personal statements about themselves. Cars have come to represent the taste and income level of their owners, and to indicate what is important to the owner, whether those values are thrift, luxury, an active lifestyle or nonconformity. Marketing decisions in this industry are made based on which segment is being targeted, and the highest profit margins are found, not surprisingly, at the highest price levels. This research explores the luxury car market within the United States and considers strategic options for a company entering this market.

The luxury car market is still led by American brands Cadillac (a division of General Motors) and Lincoln (a division of Ford), which posted sales of 182,624 units and 139,540 units respectively in 1997. BMW and Mercedes, the two largest European competitors in the market posted sales of 122,500 and 122,417 during the same year. Japanese competitors, including Honda, Toyota and Nissan (with their Acura, Lexus and Infiniti brands) account for approximately an additional 250,000 collectively (Vlasic 78). In sum, this market sells fewer than one million cars in the United States, but automakers actively pursue the market because of the high profit margins and the brand recognition which comes from having entries in the luxury market.

Growth in the American luxury car market has been slowing in recent years as consumers turn to sport utility vehicles rather than traditional luxury cars. The same is true in the European market, where automakers also compete with many of the same brands as in the United States, although sport utility vehicles have made less of an impact on the luxury market there than in the United States (Carter 23...

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Luxury Auto Market. (1969, December 31). In LotsofEssays.com. Retrieved 02:34, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1695310.html