Cain's Segments: Luxury Crossovers

A strong start to 2014 has the BMW X3 leading its segment even as it’s challenged more closely in BMW showrooms by the slightly smaller and less expensive X1.

X1 sales in February jumped 57% to 2329 units, only 318 units shy of what BMW USA managed in January and February of 2013 combined. More direct competition for the X1 is set to arrive soon in the form of the Mercedes-Benz GLA and Audi Q3.

At this time, however, potential X1 buyers look across the BMW showroom floor and wonder why they wouldn’t pay a bit more for the X3. Over the last two months, 62% of the X1/X3 juggernaut’s sales have been X3-derived, up just a hair from last year’s 61%.

The X3 outsold Acura’s much less costly RDX by 390 units in February. The RDX is wildly popular, but like the X3, it’s not among the quartet of top-selling premium utility vehicle nameplates in America.

That group begins with the Lexus RX, a viable alternative to these entry-level crossovers, particularly as Lexus doesn’t yet offer a production version of the LF-NX Concept. Likewise, the Cadillac SRX would be seen by many to be Detroit’s rival for the X3, RDX, Q5, and GLK, at least until Lincoln’s MKC arrives. The third-ranked premium SUV/CUV nameplate in America is the Acura MDX; it’s followed by the Mercedes-Benz M-Class.

Although they don’t lead the way for premium automakers, for many buyers these entry points to the brands’ crossover lineups form the entry point to the brand, full stop. Forget the CLA, A3, and 2-Series; passenger cars with trunks that they are. Growth from these luxury crossovers is significant, especially when one considers that America’s new vehicle market hasn’t grown at all in 2014. The RDX, Q5, X1, X3, QX50, LR2, and GLK have all sold more often over the last two months than during the first two months of 2013.

The Audi Q5’s slight February decline was the first such decrease for the Q5 since October 2012. Q5 volume has improved each year since the model arrived in 2009. Land Rover’s Range Rover Evoque is certainly small enough to be displayed here, although its base price might place it out of reach for a typical Acura RDX customer. Evoque sales are down 5% this year; February volume slid by 54 units. (The Range Rover Sport generated two-thirds of Land Rover’s U.S. February volume.)

Volvo’s XC60 is, not unlike the Volvo brand which it helps to lead, struggling in the United States. Like the Q5, XC60 sales have improved each year since it arrived in 2009, but 2014’s inauspicious start is not terribly surprising given the brand’s recent struggles to attract large numbers of American buyers.

Nevertheless, the story of small luxury crossovers is not told with an emphasis on irregular year-over-year decreases. The RDX, X1, X3, QX50, LR2, and GLK jointly rose 26% in February 2014. Those were not at all the sorts of figures commonly achieved by automakers last month.