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Luxury Car Buyers Shift Gears on Desire

The line between near-entry luxury and nonluxury sedans has become increasingly blurred . / Credit: Man shifting gears image via Shutterstock

The power of luxury car wannabes such as "Baby Beamer" or "Mini Mercedes" to drive standard car buyers into becoming buyers of real luxury cars has lost much of its mojo.  New data shows that more than three-quarters (78 percent) of those considering such a near-entry luxury car are also looking at nonluxury models as well, including upper middle sedans (36 percent), small cars (23 percent) and lower middle sedans (19 percent).

This is not good news for new car salesmen using the wannabes to upsell prospects.

The line between near-entry luxury and nonluxury sedans has become increasingly blurred in terms of features offered and pricing, according to a new automotive study conducted by GfK, one of the world's largest research companies.

This new study indicates that loyalty to the near-entry luxury category is also dropping; only 38 percent of those who own a car in the category are planning to buy another near-entry luxury vehicle. That's down from 43 percent in 2007.

Meanwhile, the rate for switching to a nonluxury model has grown — 37 percent in 2012 versus 29 percent in 2007.

These luxury car wannabes account for just 4 percent of industry sales, while the upper middle, small car, and lower middle segments combine for 46 percent of all sales.

There's also a far greater disconnect between sales desire and sales conversion in this category, GfK found. While intenders in the near-entry luxury category convert at a rate below 100 percent, the lower middle sedan category grows by about 150 percent between intention and purchase. Just 7.1 percent of vehicle intenders are in the lower middle category, but they account for 17.5 percent of all sales.

"Adding sexier looks to better perceived value for the money and fuel economy has been a winning combination for nonluxury cars," said Jeff Campana, senior vice president of GfK Automotive. "It’s clear that a significant number of auto shoppers who start out looking at Near-Entry Luxury cars wind up buying in the nonluxury category – with economic uncertainty and high gas prices likely playing a role."

Reach BusinessNewsDaily senior writer Ned Smith at nsmith@techmedianetwork.com. Follow him on Twitter @nedbsmith.We're also on Facebook & Google+.

Ned Smith

Ned was senior writer at Sweeney Vesty, an international consulting firm, and was Vice President of communications for iQuest Analytics. Before that, he has been a web editor and managed the Internet and intranet sites for Citizens Communications. He began his journalism career as a police reporter with the Roanoke (Va.) Times, and was managing editor of American Way magazine and senior editor of Us. He was a Captain in the U.S. Air Force and held a masters in journalism from the University of Arizona.