Domestic Luxury Trucks Now Usurping Germany's Market Share of Premium Vehicles

Matt Posky
by Matt Posky
domestic luxury trucks now usurping germanys market share of premium vehicles

We did it! Thanks to the modern obsession with larger vehicles and opulence, domestic luxury brands are taking off like a rocket. It’s going so well, in fact, that American automakers are starting to steal market share from high-end import manufacturers. Of course, this is only applicable to SUV and crossover sales.

As you know, sedan sales are losing ground to their high-riding counterparts. While this hasn’t resulted in the obliteration of the passenger car market, despite claims to the contrary, those vehicles are being massacred by wayward consumers. Sedans are becoming passé and this has allowed sport utility and crossover vehicles to amass a significant portion of the pie.

Nowhere is this more apparent than in the luxury market. The rapid growth of the luxury truck segment has substantially increased the United States’ share of domestic models sold with an average transaction price of $60,000 or more. Apparently, the inarguably phenomenal Mercedes-Benz S-Class doesn’t have jack squat on the GMC Yukon Denali.

Suck it, cars.

Obviously, we don’t truly believe that. Even with SUV sales blasting off into the stratosphere, sedans are coming off an absolutely massive share of domestic light vehicle sales. Even if they were to decline in popularity at their current rate, it would take many years before they became an insignificant portion of the market. We don’t want to be cocky about this, either. Look what’s happened to the minivan segment.

The fact remains that Americans are abandoning family sedans and small cars for sport utility vehicles and trucks. The New York Times estimates that, last month, two of every three new vehicles sold were classified as trucks — either SUVs, crossovers, pickups, or minivans. The trend isn’t exclusive to mainstream nameplates. Luxury brands have been scrambling to flesh out their lineups to account for the shift in preference and domestic manufacturers have done an incredible job.

GMC accounted for 11.3 percent of domestic sales for models with an average price of $60,000 or more in 2017, according to data from Edmunds. Five years earlier, the brand made up a mere 0.1 percent of those sales. Ford and Chevrolet witnessed similar, albeit more modest, increases driven by ultra-premium truck and SUV sales. However, both started with their feet a little deeper in the market.

Meanwhile, the share of the U.S. over-$60,000 club inhabited by Porsche, Mercedes-Benz, Lexus, Jaguar and Cadillac actually shrank by a considerable margin in the same timeframe. Established luxury brands are now losing ground to mainstream automakers in the premium segments. Hell, Ford will sell you a pickup that costs roughly $100,000 now. What a time to be alive!

“We are seeing it,” said Tom Libby, an industry analyst for IHS Markit. “There is movement from luxury cars to luxury trucks.”

It makes sense for automakers to push SUVs as hard as possible, too. They can charge more for them, and the profit margins are far better than that of sedans. In fact, certain cars even lose automakers money. General Motors reportedly loses around $9,000 on every Chevrolet Bolt it sells. While that’s a pretty extreme example (but weirdly common among electric cars), sedans just aren’t making the kind of fast cash that trucks are.

General Motors outlined its plan to produce even more pricey Denali variants for GMC at a recent investor conference. The company highlighted data indicating that the Denali line had an average sale price of $56,000, which is far more than the average transaction price for any of the German luxury brands that aren’t Porsche.

“This thing is a money machine,” said GM president Dan Ammann.

He’s not wrong. Domestic automakers make tens of thousands of dollars on a single well-optioned truck or SUV, and they’re going to milk them for every dime. Ford only started production on the fourth generation of the Expedition, along with the Lincoln Navigator, in September of last year. It has decided to build 25 percent more this year than originally planned.

At the same time, luxury sedan volume is shrinking. These models held roughly 7.5 percent of the total domestic market in in 2013, but that number slipped to 5.4 in 2017. But manufacturers can load up a fairly basic truck with all the trimmings and it suddenly becomes irresistible. Currently, over half of all F-Series sales come from Lariat, King Ranch and Raptor models. That’s up from one-third just four years ago. Meanwhile, Denali editions now account for 29 percent of all GMC’s sales.

[Image: General Motors]

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  • SuperCarEnthusiast SuperCarEnthusiast on Feb 21, 2018

    People just love the utility that trucks provide and it becoming a statue symbol. I am looking at either a Bronco, G550, Passport or possibly a new black label Navigator! Just depend which one of them I like the most! Just sort of wild that trucks would be so popular!

  • DownUnder2014 DownUnder2014 on Feb 28, 2018

    My area has quite a few utes (actual and what'd you call light pickup trucks). CUVs are also very popular (especially older Territories and Klugers). They really are more multi-purpose than they used to be. SUVs in my area tend to be either Prados, older Patrols (GQ), older Land Cruisers (80 and 100) and a few 1990s Pajeros... It's still mostly a sedan/hatchback area. It just really depends where you are... There's not too many true luxury SUVs here, but high-spec Prados and higher-spec LC200s I see often enough, other than that, I do see the occasional Y62 Patrol...

  • Lou_BC "They are the worst kind of partisan - the kind that loves their team more than they want to know the truth."Ummm...yeah....Kinda like birtherism, 2020 election stolen, vast voter fraud, he can have top secret documents at Mar-lago, he's a savvy business man, and hundreds more.
  • FreedMike This article fails to mention that Toyota is also investing heavily in solid state battery tech - which would solve a lot of inherent EV problems - and plans to deploy it soon. course, Toyota being Toyota, it will use the tech in hybrids first, which is smart - that will give them the chance to iron out the wrinkles, so to speak. But having said that, I’m with Toyota here - I’m not sold on an all EV future happening anytime soon. But clearly the market share for these vehicles has nowhere to go but up; how far up depends mainly on charging availability. And whether Toyota’s competitors are all in is debatable. Plenty of bet-hedging is going on among makers in the North American market.
  • Jeff S I am not against EVs but I completely understand Toyota's position. As for Greenpeace putting Toyota at the bottom of their environmental list is more drama. A good hybrid uses less gas, is cleaner than most other ICE, and is more affordable than most EVs. Prius has proven longevity and low maintenance cost. Having had a hybrid Maverick since April and averaging 40 to 50 mpg in city driving it has been smooth driving and very economical. Ford also has very good hybrids and some of the earlier Escapes are still going strong at 300k miles. The only thing I would have liked in my hybrid Maverick would be a plug in but it didn't come with it. If Toyota made a plug in hybrid compact pickup like the Maverick it would sell well. I would consider an EV in the future but price, battery technology, and infrastructure has to advance and improve. I don't buy a vehicle based on the recommendation of Greenpeace, as a status symbol, or peer pressure. I buy a vehicle on what best needs my needs and that I actually like.
  • Mobes Kind of a weird thing that probably only bothers me, but when you see someone driving a car with ball joints clearly about to fail. I really don't want to be around a car with massive negative camber that's not intentional.
  • Jeff S How reliable are Audi? Seems the Mazda, CRV, and Rav4 in the higher trim would not only be a better value but would be more reliable in the long term. Interior wise and the overall package the Mazda would be the best choice.