If you have been following auto sales for the past few years, then you know that SUVs and trucks currently dominate the sales charts partly due to the low gas prices. This is especially true when it comes to the luxury segment, where utility models are eating sedans. But a new report from The New York Times reveals that American automakers are eating the lunches of luxury car manufacturers.
According to data from Edmunds, the likes of Ford, Chevrolet, and GMC have seen their share of domestic sales of models with an average price of $60,000 steadily climbing, while luxury brands like Mercedes-Benz, Porsche, and Lexus have been declining. GMC, in particular, has shown the largest growth, accounting 11.3 percent of domestic sales of $60,000-plus models in 2017. Five years ago, the brand only made up 0.1 percent of those sales. A lot of this credit can be laid at the feet of GMC's Denali brands. At a recent investor conference, GM showed data that the Denali line had an average sale price of $56,000 - more than the average price of an Audi, BMW, or Mercedes-Benz.
“This thing is a money machine,” said GM's president Dan Ammann about Denali.
Over at Ford, more than half of F-150 sales are made up by the Lariat, King Ranch, Raptor models. Only a few years ago, those models made up a third.
Why are American automakers seeing a massive increase in expensive SUVs and trucks? Part of it comes down to price, but there is also the image.
“We’ve been taking in Lexuses on trade-ins, BMWs," said Gary Gilchrist, owner of a GMC dealer in Tacoma, Washington.
“People used to want German cars for the image factor. Now, if you have a Denali, you get that. People turn their heads to look.”
Source: New York Times