Cain's Segments, Small Luxury Crossovers: July 2014

For the most part, their bigger and more expensive brethren sell more often. But this group of small luxury crossovers is gaining a smaller subset as we speak, one which will see the declining BMW X1 move over to its own category.

Meanwhile, the remaining contestants will be joined by the Lexus NX, a smaller, four-cylinder-only alternative to the Lexus RX. The RX is, by far and away, America’s top-selling premium brand utility vehicle. 9658 RXs were sold during the month of July 2014, or more than the Mercedes-Benz GLK, Audi Q5, BMW X3, and BMW X1 combined.

Like Lexus, Cadillac could make use of a smaller SRX alternative. Like the RX, the SRX is a viable competitor for these entry-level premium crossovers. SRX sales totalled 4599 units in July, a slight decrease in the midst of steady growth for the Cadillac’s most popular model.

Added to the 3532 RDXs sold by Acura in July 2014 were 6283 MDXs. (The MDX’s base price requires a 22% jump beyond the RDX.) Although the Mercedes-Benz GLK outsold the M-Class in July, it has never done so on annual basis and is not likely to do so this year – the ML leads the GLK by 2708 units heading into August. BMW’s X5 sells slightly more often than the X3; far more often in the X3’s declining July. Infiniti’s QX50 is mostly ignored by Infiniti customers and the overall market. Land Rover sells more Range Rover Sports than Evoques and LR2s combined.

We won’t make any judgements on the Lincoln MKC as it stands now: MKC sales have only just begun, and the larger MKX is about to be replaced. But at this moment, the aging MKX is selling more often than the brand spankin’ new MKC. Similarly, the Volvo XC90 has been around for eons and will soon be replaced; the XC60 is thus far more popular. Porsche’s Macan sold once in July for every 1.6 Cayennes.

The Audi Q5 stands in contrast, as it has routinely outsold the larger (and now old) Q7 since the Q5 arrived in 2009. In July, specifically, the Q5 was more than twice as common a sale as the Q7.

This is nevertheless a growth segment within a growth sector. If crossovers are the future, particularly in the premium arena, then smaller, more affordable “luxury” crossovers will bring the future forward. The Macan won’t always be as expensive as the Cayenne; the Q5 will be joined by a Q3; the GLK will be joined by the GLA. Infiniti will maybe, perhaps, possibly, some day replace the QX50. The MKC will become a more common sight.

Even as it stands at this moment, this group of vehicles has generated a 14% year-over-year sales increase in 2014 in an industry that’s grown 5%. Subtract the trio of newcomers and the 9% rate of growth still exceeds the industry’s average.