Premium brands secondary against the triad German

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Genesis is the Premium brand of the Group Hyundai Kia, for the moment only account with the G90

we Can divide the car market in three major categories: generalists, Premium and luxury. In the first group get manufacturers to offer products targeting simple or average, while the Premium in a higher level of differentiation. The luxury manufacturers are concentrated in very low-volume and high prices.

we have Already seen in detail what a brand is Premium, and we’ll talk about the new ones that are coming out. Now seems to be virtually assimilated in the industry that doesn’t make much sense to sell on the same site, cars of less than € 10,000, 60,000, and 120,000 or more. The segmentation by brands is required to help the customer to perceive the differentiation sought.

To have the Premium brands for a margin of sale greatly increased, it leaves more profitable to sell fewer cars Premium that many generalists: slightly more than 10% of sales give you the 50% of the profits. In the following table you can see what are the sales volumes of the major Premium brands. The constraints stated in 100,000 units a year, so that we will not see a Jaguar or DS:

Premium Brands Volume in 2015 (* if this is record)
BMW 1.905.234 (*)
Mercedes-Benz 1.871.511 (*)
Audi 1.803.250 (*)
Buick 1.231.941 (*)
Lexus 652,000 in (*)
Volvo 503.127 (*)
Land Rover 403.079 (*)
MINI 338.466 (*)
Cadillac 277.868
Porsche 225.121 (*)
Infiniti 215.250 (*)
Acura 177.165
Lincoln 120.630

Germany cuts the cheese

As we can see, the three monarchies Premium German lead with authority the list, being very far away from the rest of brands. Calls powerfully the attention that without living in a economic time of special abundance, the vast majority of brands have announced records absolute sales. Where is the crisis then?

BMW leads the Premium market since 2005

Mercedes-Benz and Audi are fighting for the second spot for years. These three brands compete to such a level, that when one takes out a new segment or a product that works decently, the other two end up doing the same thing. The latest example is the Mercedes GLC Coupe, the answer to the BMW X4. We also have the GLE Coupe, namesake of the BMW X6.

in Addition, these three brands are beginning to grow impressively your catalog of products, getting to be a real headache to learn them all, more than 20 brand. The ranges are expanded from top to bottom, colonizing segments before that are exclusive to manufacturers generalist, looking for clients more and more young people, and with less money. There we have the example of Porsche, which has achieved its sales target for 2018, the last year, more than 200,000 cars in a year.

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Range Lexus 2014 posing with the LS 400 1989

The american market is the key to understanding all of this

Until China took the first place in sales of cars, the most important country was the united States. When the priority was not to fill China of cars, the target customer was the american. The japanese decided to at the end of the 80’s to create specific brands for them, taking example from the american manufacturers.

General Motors had with the brands Cadillac, Oldsmobile and Buick for the high end, Ford had Lincoln and Mercury. Honda founded Acura in 1986, and in 1989, Toyota did the same with Lexus, and Nissan attacked with Infiniti. At first, the three Premium brands of japanese made “tuning” of existing models, and ended up having its own portfolio of products, with some shared with the main brand.

Lexus comes of Luxury EXports United States

today, the three Premium brands japanese are considered “Tier 2”, that is to say, a kind of second division, because they can’t reach to the germans. However, Lexus sells more than its rivals japanese together and has a more global approach, with a greater range and rich in versions.

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DS Divine Concept, the first DS that dispenses with the logos of Citroën

The cleavage of the Genesis of the Hyundai brand responds to the same strategy followed by DS in the PSA Peugeot Citroën Group and the Vignale Ford. Want to offer a product of higher range, with the perception of a higher range. This prevents sharing of logos with cars of modest budget, and can be put in higher prices. In addition to the G90, Genesis has presented the New York Concept to anticipate your answer to 3 Series, A4, and Class C.

The next to appear will be Initiale Paris, Renault

Very few cases we are going to meet high-end cars that operate commercially under a flagship generalist. For example, at Volkswagen we have a case of success with the Touareg, but a total failure if we talk about the Phaeton. Citroën, Peugeot and Renault have learned that with their shields, you can’t sell high-end car with the same success getting Premium brands ad hoc.

the united States, China and Europe are three key markets where there are that succeed. Not all brands have succeeded yet, as PSA Peugeot Citroën, who wants to return to the united States with DS, or Lincoln, centered in the US and China. The pie of customers extends to the sell each time in segments more humble. Therefore, we cannot say yet that the cake has a limited size, fit new competitors, even though it takes years to achieve fruit.