Summary
- Premium luxury and ultra-luxury SUVs are one of the strongest segments in the market, surprisingly
- Almost every brand has posted year-over-year sales increases in Q1 2024
- There are three trends in premium and ultra-luxury that mean the most to buyers right now:
- Hybridization
- Autonomous Assists
- Enhanced Connectivity
- We think that if things stay trending as they are, the premium lux and ultra-lux segment might come out of 2024 with one of its stronger years, maybe its strongest year, in recent memory
In our Q1 2024 review earlier this year, one of the points made was that the premium luxury and ultra-luxury segment were two of the few that was predicted to continue growing through the year. Now that we have hit the halfway point of 2024, it is time to investigate if that prediction has held true.
Keep in mind, we are going one step beyond the typical luxury SUV market. We’re moving up to the range of Bentley, Rolls-Royce, Lamborghini, Aston Martin, and the like. To determine the dynamics, we’ll be looking at units sold growth year-over-year, and the emerging most important trends for ultra-luxury and premium luxury customers.
Note: For some vehicles, we might only have their Q1 2024 reports as some manufacturers do not disclose monthly figures, only quarterly.
Sales Winners & Losers
While this market segment often sees sales numbers under 10,000 units per quarter, there have been some pretty significant sales bumps year over year
Take, for example, the American premium luxury SUV of choice, the Cadillac Escalade (specifically the Premium Luxury trim and on up). In Q1 2023 it moved 5,523 units, while in Q1 2024, it moved 9,135 units. That is a YOY percentage increase of 65.40%, making it one of the biggest winners so far in 2024.
On the other side of the coin, Rolls-Royce, who are as secretive about their numbers as ever, has recently reported that their Q1 2024 sales in the USA are down 7% compared to 2023. The reasoning given is that the Cullinan, their ultra-luxury SUV, is getting a mild facelift so they haven’t taken any new orders for them and are only fulfilling previously made orders, although that information is accurate up to May 2024 only.
For Bentley with their Bentayga ultra-luxury SUV, they too are keeping their numbers pretty close to their chest. What can be found, however, is that Bentley has reported that across Q1 2024, the Bentayga, in all of its trims, has made up for 44% of sales, and the VW group expects sales to be fairly steady with their ultra-lux brand across 2024.
In pure numbers, that means that they expect sales for 2024 to reach about 13,600. Doing a little math, that means 3,400 vehicles per quarter, and of those approximately 1,496 are expected to be Bentayga’s. This is an improvement over Q1 2023 when the Bentayga made up about 41% of sales, so it can be counted as a win.
The biggest winner, howver, with a huge margin is the premium luxury model of Land Rover, the Range Rover. Q1 2023 saw a total of 2,920 units sold, while Q1 2024 saw no less than 4,946 units sold. In percentages, that’s a massive 69.38% jump.
Trends For 2024 & 2025
The biggest trend in premium and ultra-luxury SUVs right now can be simplified down to three major areas: Hybridization, Autonomous Assistance, and Enhanced Connectivity.
Hybridization
Apart from a few stalwart holdouts, almost every premium and ultra-luxury brand that produces an SUV has some form of hybrid engine on offer. In fact, with the exception of the top trim level of the Bentley Bentayga, all of the lower trims offer either a combustion engine or hybrid engine.
This trend is partially because of the current stagnation of EV SUVs, especially as no ultra-luxury EV SUV exists at the moment. The more significant impact on the drive to hybrids is the entire market shifting in that direction. This is especially true for many of the clientele of the ultra-luxury brands are, as Bentley CEO Adrian Hallmark recently stated, going through a period of “Emotional sensitivity” about the economy.
Still, if you move down to the ultra-luxury car segment, every ultra-luxury manufacturer has a hybrid or full EV model, such as the Spectre EV for Rolls Royce. Since ultra-lux cars are still an in-demand amenity, often with a hired chauffeur driving them for the super-wealthy, they will still make sales.
Autonomous Assistance
It does need to be pointed out that this does not necessarily mean fully autonomous driving any time soon. What the term does mean is that things such as per wheel braking, radar and lidar controlled cruise control, automatic emergency braking, and collision detection and avoidance systems are becoming the norm.
This isn’t all that surprising, as when you are spending over $200,000 on a vehicle, you are expecting it to have the latest and greatest of innovations and tech. In recent years, this has even included cabin monitoring systems that take climate control to the next level, keeping the interior precisely at your requested temperature by monitoring your body temperature, the air temperature and humidity, the outside air temperature, and adjusting the temperature of the air exiting the vents inside a few times a second.
Enhanced Connectivity
While connectivity right now in vehicles is at the Internet of Things (IoT) stage, a newer technology is emerging that is known as Vehicle-to-Everything (V2X).
V2X is a natural evolutionary step as wireless connectivity at this point is getting to be almost ridiculous. Things such as remote start of the vehicle from your phone, proximity based locking and unlocking, and detecting which driver is approaching if there is more than one and moving the seat, pedals, and steering wheel before they arrive are coming to not just be cool features, but expected features on premium and ultra-lux vehicles.
The other side of V2X is that some cities in Canada and the US have a new type of traffic sensor that uses both Bluetooth and wireless to detect the speed and mass of traffic. If a traffic jam forms, or there is a slow moving area, transmitters spaced along the roadway will broadcast a universal signal that your car can detect. That signal is coded to talk to sat-nav systems and have them make course adjustments to avoid the jam.
This style of connectivity first appeared on Porsche cars in the mid-2010s in a pilot project in the UK. It detected jams, slow moving traffic, and even speed cameras. When drivers went out to verify, it was right 99% of the time, even down to the meter for speed camera locations.
One Of The Few Segments Growing Strongly
As can be seen from the sales winners and losers, things are looking pretty good for the premium and ultra-luxury SUV segment of the market.
We think that predictions from earlier this year, by us as well as by analysts and the manufacturers themselves, will hold true. This could be one of the best sales years in ages for the segment, should interest and consumer buying dynamics still hold. It also helps that these segments are lower production areas, which generally leads to more options for customization and more attention to detail.
