Luxury vehicle

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A Rolls-Royce model Phantom IV, a 1950s luxury car

Luxury vehicle is a marketing term for a vehicle that provides luxury—pleasant or desirable features beyond strict necessity—at increased expense.

The term suggests a vehicle with higher quality equipment, better performance, more precise construction, comfort, higher design, technologically innovative modern, or features that convey an image, brand, status, or prestige, or any other 'discretionary' feature or combination of them. The term is also broad, highly variable and relative, it is a perceptual, conditional and subjective attribute that may be comprehended differently by different people; "What is a luxury car to some... may be 'ordinary' to others."[1]

In contemporary usage, the term may be applied to any vehicle type—including sedan, coupe, hatchback, station wagon, and convertible body styles, as well as to minivans,[2][3] crossovers, or sport utility vehicles and to any size vehicle, from small to large—in any price range.[1] Moreover, there is a convergence in the markets and a resulting confusion of luxury with high price: where there may have been a clear difference in price between luxury and others, there is no longer an absolute separation between premium and luxury, with what may be premium brands now more expensive than the equivalent so-called luxury ones.[4]


Some car manufacturers market their luxury models using the same marque as the rest of their models. Other manufacturers market their luxury models separately under a different marque, for example Lexus (launched by Toyota in 1989)[5] and Bentley (purchased by Volkswagen in 1998).[6][7] Occasionally, a luxury car is initially sold under a maintream marque and is later re-branded under a specific luxury marque (for example the Hyundai Genesis / Genesis G80).[8][9]

For mass-produced luxury cars, sharing of platforms or components with other models is common,[10] as per modern automotive industry practice.

Classification standards[edit]

Several car classification schemes which include a luxury category, such as:

  • Australia: Since the year 2000, the Federal Government's luxury car tax applies to new vehicles over a certain purchase price, with higher thresholds applying for cars considered as fuel efficient.[11][12] As of 2019, the thresholds were approximately AU$66,000 (US$51,000) for normal cars and AU$76,000 (US$58,000) for fuel efficient cars.[13]
  • Europe: Luxury cars are classified as F-segment vehicles in the European Commission classification scheme.[14][15][16]
  • France: The term "voiture de luxe" is used for luxury cars.[17]
  • Germany: The term German: Oberklasse (upper class) is used for luxury cars.[18]
  • Russia: The term (автомобиль представительского класса ("representative class vehicle, also translated as luxury vehicle) is used for luxury cars.[19]
  • Rental cars: The ACRISS Car Classification Code is a system used by many car rental companies to define equivalent vehicles across brands. This system includes "Luxury" and "Luxury Elite" categories (along with "Premium" and "Premium Elite" categoryies),[20] the criteria for a vehicle to be considered "luxury" is not published.

Market categories[edit]

Premium compact / entry-level luxury[edit]

The premium compact class is the smallest category of luxury cars, it became popular in the mid-2000s, when European manufacturers— such as Audi, BMW and Mercedes-Benz— introduced new entry level models that were smaller and cheaper than their compact executive models.[21]

Examples include the Alfa Romeo Giulietta, Audi A3, Buick Verano, BMW 1 Series, Lexus CT 200h,[5] Infiniti Q30, Mercedes-Benz A-Class,[22][23] Mercedes-Benz B-Class, Volvo C30[24] and Volvo V40.[25][26] Premium compacts compete with well-equipped mid-size cars, and highly optioned premium compact cars can have pricing and features that operlaps with compact executive cars.[27]

Compact executive / compact luxury[edit]

A compact executive car is a premium car smaller than an executive car. In European classification, compact executive cars are part of the D-segment; in North American terms, close equivalents are "compact premium car", "compact luxury car",[28] "entry-level luxury car" and "near-luxury car".[29]

Executive / mid-size luxury[edit]

Genesis G80 (2016-present)

Executive car is a British term for an automobile larger than a large family car; in official use, the term is adopted by Euro NCAP, a European organization founded to test for car safety. It is a passenger car classification defined by European Commission.

Luxury saloon / full-size luxury sedan[edit]

The next category of luxury cars is known in Great Britain as a luxury saloon or luxury limousine,[30][31][32][33] and is known in the United States as a full-size luxury sedan or large luxury sedan.[34][35][36][37] It is the equivalent of the European F-segment and German Oberklasse segment.

Many of these luxury saloons are the flagship for the marque and therefore include the newest automotive technology.[38] Several models are available in long-wheelbase versions, which provide additional rear legroom and often a higher level of standard features.[39]

Examples of luxury saloons / full-size luxury sedans include the BMW 7 Series,[40] Cadillac CT6[41][42] Genesis G90,[41] Mercedes-Benz S-Class,[40] Lexus LS,[41] and Porsche Panamera.[40]


Luxury cars costing over US$100,000 (as of 2007) can be considered as "ultra-luxury cars".[43] Examples include the Rolls-Royce Phantom, Maybach 57 and Bentley Arnage.[43][44] Exotic cars which are targeted towards performance rather than luxury are not usually classified as ultra-luxury cars, even when their cost is greater than US$100,000.[43][45]

Several entry-level models from low-volume luxury car manufacturers, such as the Bentley Continental GT and the Rolls-Royce Ghost have been described as "entry-opulent" cars.[46]

Many ultra-luxury cars are produced by brands with a long history of manufacturing luxury cars,[47][48] the history of a brand and the exclusivity of a particular model can result in price premiums compared to luxury cars with similar features from less prestigious manufacturers.[49]

V12 engines (or W12 engines for Volkswagen Group brands) are common in ultra-luxury cars.[50][51][52]

Luxury SUV/Crossover[edit]

The Jeep Wagoneer is considered to be the first luxury SUV

Although only becoming popular in the 1990s, this category has been said to be created with Kaiser Jeep's 1966 Super Wagoneer as the first true luxury four-wheel drive (4x4) vehicle.[53] It was the first serious off-road SUV to offer a V8 engine, automatic transmission, and luxury car trim and equipment,[54] the Super Wagoneer was "a pioneer that blazed a trail for today's luxury SUVs".[55] It came with long list of standard equipment that included bucket seating with center console, air conditioning, seven-position tilt steering wheel, a vinyl roof, as well as "Antique Gold" trim panels on the body sides and tailgate.[55] After American Motors Corporation (AMC) purchased Jeep, the vehicles were upgraded and refined, including features such as an optional electric sliding steel sun roof, "possibly the first offered on an SUV",[56] the late-1970s Jeep Wagoneer Limited "set the sport-utility market on its ear ... was the most luxurious four-wheeler anyone had ever seen."[57]

The Lincoln Navigator is an example of a full size luxury SUV
The Range Rover Evoque is an example of a British luxury SUV/Crossover

The venerable Grand Wagoneer was still the leader in the luxury SUV market in 1986, and continued to be produced virtually unchanged through 1991, long after Chrysler bought out American Motors Corporation (AMC) in 1987,[58] the SUV market soon expanded with new entrants. By the mid-1990s, the U.S. Big Three automakers, "especially with Ford's Explorer and Jeep's Grand Cherokee, dominate[d] the market for the red-hot sport/utilities."[59] The fastest growing sector of this market was for the so-called luxury SUVs, which included the Jeep Grand Cherokee ... the Grand Cherokee's allure: "This vehicle is proof you can have a true off-road vehicle without giving up luxuries and amenities" with the Jeep providing a crucial new intangible factor for buyers—image.[60]

The SUV models generated higher-profit-margins than ordinary automobiles, and automakers introduced new luxury models during the late 1990s,[61] starting with Lincoln Navigator in 1997,[62] besides traditional models like the Grand Cherokee. For some manufacturers such as Porsche and BMW, luxury SUVs were the first SUV models they produced. Luxury SUVs catered particularly to the U.S. market where station wagons were unpopular, often being produced in North America (such as BMW Spartanburg) instead of the luxury marque's home country. Some of these models were not traditional SUVs based on light trucks, rather they are classified as crossovers using unibody constructions. SUVs from non-luxury brands had experienced a surge in popularity through early 2000s, causing the traditional luxury marques to follow.[63][not in citation given]

SUVs from the luxury marques grew at almost 40 percent to more than 430,000 vehicles, excluding SUV-only brands like Hummer and Land Rover, while luxury car sales in the U.S. during 2003 suffered a 1% decline, and non-luxury SUV sales were flat. By 2004, 30 percent of major luxury brands' U.S. sales are now SUVs. Luxury brands in particular led the development of crossover SUVs (as opposed to body-on-frame SUVs), making it one of the fastest growing segments in the market, as the forecast for 2002 was approximately 240,000 vehicles and that could double by 2006.[64] Research data showed luxury SUV buyers are compared those vehicles to SUVs of mass market brands, and not shopping around luxury cars, thus the SUV is becoming the key to bringing new customers to the luxury dealerships.[65]

Certain luxury SUVs use body-on-frame underpinnings, often being badge-engineered versions of their non-luxury counterparts, and retaining the rugged off-road and towing capabilities. Examples include the Lexus LX, Infiniti QX80, and Lincoln Navigator, which are the premium versions of the Toyota Land Cruiser (which is considered as a luxury SUV itself), Nissan Patrol, and Ford Expedition, respectively.[66]

Other luxury SUVs are crossovers using unibody construction, often sharing the platform with compact executive and executive cars, for example, the Infiniti FX is based upon the Nissan FM platform that also underpins other Infiniti cars. Audi and BMW developed crossovers to compete in the SUV segment as they did not have an existing body-on-frame vehicle in their lineup.[64][67] The Lexus RX was the earliest luxury crossover on the market, and it has since been the best-selling luxury vehicle in the US, so it has inspired similar competitors from rival marques.[68] While early luxury crossovers released in the late 1990s have resembled traditional boxy SUVs, recent offerings have prioritized sportiness over utility—such as the Infiniti FX and BMW X6.[69][70][71]


A Spanish luxury car brand was Hispano-Suiza, here is twelve cylinder J12


Luxury cars tend to offer a higher degree of comfort than their mainstream counterparts, common amenities include genuine leather upholstery and polished wood or "woodgrain-look" dashboards.[72] Compared to mainstream vehicles, luxury cars have traditionally emphasized comfort and safety.[73] Luxury vehicles are also a status symbol for conspicuous consumption.[74]

Contemporary luxury cars also offer higher performance and better handling, which is often known as sport luxury.[75][76] However, in Europe, where large-displacement engines are often heavily taxed and many luxury buyers shy away from conspicuous consumption, brands offer buyers the option of removing exterior engine-identifying badges.[77]

Forbes noted that the reputation of luxury marques enables them to continually introduce many new safety technologies and comfort amenities, such as anti-lock brakes, electronic stability control and DVD entertainment systems, long before they trickle down to mass market cars. Numerous "smart car" features were found on luxury cars as early as 2009.[74]

Layout and powertrain[edit]

Front mounted longitudinal engines with rear-wheel drive (FR) is a common layout of luxury cars. European marques like Mercedes-Benz , BMW , and Jaguar have almost never adopted front mounted engines with front-wheel drive (FF) and retained a lineup mostly or entirely made up of FR cars. Japanese brands such as Lexus and Infiniti also have predominantly FR lineups, the FR layout, while more expensive than the FF, has been retained by these luxury manufacturers as it allows for higher performance engines (particularly the straight-6, V8, and other engine configurations with more cylinders), better handling, and a smoother ride. [77][78][79][80]

American manufacturers also largely followed the FR for their luxury brands (as well as their mass-market cars of the time). However, due to the Arab Oil Embargo of 1973 and the 1979 fuel crises, began eliminating their FR platforms in favor of the more economical front wheel drive transverse engine layout (FF). Chrysler went 100% FF by 1990 and GM's Cadillac and Buick brands for the US were entirely FF by 1997. One of the few notable holdouts was Ford's Lincoln Town Car and Lincoln LS.[81]

In the 21st century, as part of the revamp of its design and image,[82] Cadillac returned most of its lineup (sedans, roadsters, crossovers and SUVs) to rear- or all-wheel-drive, the only exceptions being the front-wheel drive Cadillac BLS (since discontinued; never sold in North America);[83] Cadillac DTS (also discontinued); the Cadillac XTS (which replaced the DTS); and Cadillac ELR (a plug-in hybrid). Chrysler returned its full-size cars to this layout with the Chrysler 300 using shared technologies during the DaimlerChrysler era (Chrysler and Daimler-Benz (the parent company of Mercedes-Benz) co-developed the LX platform currently retained by Fiat Chrysler Automobiles.[84][85] Ford's Lincoln division retained the longtime FR platform for the Town Car (phased out in 2011 with no direct replacement), intended for use as a limousine and chauffeured car.[86] However, newer offerings such as the MKZ and MKS use newer FF platforms shared with mainstream Ford vehicles, the Ford Fusion and Ford Taurus, respectively, with all-wheel drive as an option.[87]

History and sales[edit]


The Bugatti Royale was one of the most expensive luxury cars

A wide array of European producers made luxury cars, including Rolls-Royce Limited, Bugatti, Delage, Delahaye, and Talbot-Lago made vehicles that are still collectible today.[88] Similarly, the Americans built the Duesenberg, Packard, Pierce Arrow, Stutz, Stearns-Knight, Cadillac, Chrysler, Lincoln and Cord luxury models.

There were also full-size luxury cars in the Soviet Union since 1930s until the 1990s, from the GAZ and ZiL (before 1956 - ZiS) factories, such as ZIS-101, ZIS-110, GAZ 12, GAZ 13 Gull, ZIL-114, ZIL-117, ZIL-4104, ZIL-41047.


The Stutz Blackhawk was personal luxury car for the richest celebrities

Germany slowly became an export powerhouse during this period, building on success with the Mercedes-Benz brand, later joined by BMW, which now owns Rolls-Royce Motor Cars, and Volkswagen, which now owns Audi, Bentley, and Lamborghini.

In the United States luxury market, Cadillac and Lincoln Motor Company had long been the best-selling and second best-selling luxury brands until 1998, when they were overtaken by Japanese and German brands,[89] these cars were not relevant in most export markets; they were tailored to the U.S. market - moderate price point luxury vehicles not constrained by gasoline pricing.

The U.S. developed a special vehicle category, the personal luxury car, a stylized, mass produced 2 door coupé, relying on standard components. These vehicles were popular from 1958 to 1980.

Before World War II, France was a leading producer of powerful luxury automobiles,[90] after World War II, the French government used puissance fiscale tax regulations to encourage manufacturers to build cars with small engines, and French motorists to buy them.[90] The Maserati-powered Citroën SM and the Citroën C6 were arguably the last domestic French luxury cars.[91][92] France is Europe's second-largest car manufacturer and its producers have benefited from the 2007 "bonus-malus écologique - ecological bonus-penalty" focusing on low CO2-emissions vehicles and also taking advantage of moving production to emerging countries of their low-end cars while manufacturing mid-range and high-end models domestically.[93] Attempts are being made to develop luxury cars, but the manufacturers lack a legacy;[94] in 2014, Citroën introduced DS Automobiles, a separate brand to embody "French luxury" in cars.[95][96]

Italy focused on high end sports cars in the luxury market, such as the Ferrari and Maserati.


Since the 1980s, a host of new manufacturers have entered the luxury market to challenge the traditional players,[97] the three major Japanese auto manufacturers, Honda, Toyota, and Nissan, created their respective luxury brands particularly for the US. As a result of voluntary export restraints imposed in 1981, these manufacturers were limited to a number of vehicles they could export. While these companies sidestepped this by establishing US production facilities for mass market vehicles, their home factories soon begun producing higher-priced cars as they carried a greater profit margin per car. Acura was launched in 1986, while Lexus and Infiniti were unveiled in 1989. By 1992, these three divisions had sales of over US$3.5 billion, using lower prices and innovation to take market share from both domestic (Cadillac, Lincoln) and the European (Mercedes-Benz, Volvo, BMW, Audi and Jaguar) luxury car makers.[98]

Mercedes-Benz and BMW were the top-selling luxury import until 1991, when they were overtaken by Lexus,[99] since 2000, Lexus has been the number-one-selling luxury car marque in the U.S.[100][101]

Since the 2000s, with the Cadillac CTS, the marque has seen a resurgence in sales and brand value.[102] Ford's Lincoln, which had seen sales fall as a result of an aging lineup, has attempted to return that luxury marque to competitiveness, by releasing new models such as the Lincoln MKS, as well as divesting itself of its other Premier Automotive Group brands.[103]

Hyundai had recently released the Genesis and the Equus, hoping to repeat the same strategy of undercutting their established competitors.[97]


The Late-2000s recession was the first time since the Great Depression of the 1930s that the luxury car market suffered considerably, something not seen in previous economic downturns. Many such customers saw their net worth decline following the collapse in financial markets and real-estate values.[74][104] For example, some of the steepest dropoffs came at the high end, including the BMW 7 Series and Rolls-Royce Phantom, and Mercedes-Benz unexpectedly dropped the starting price of its all-new 2010 E-Class. The unusually sharp decline in luxury car sales have led observers to believe that there is a fundamental shift and reshaping of the luxury automotive market, with one industry official suggesting that the marques no longer command the premiums that they used to, and another saying that conspicuous consumption was no longer attractive in poor economic conditions. [97] Additionally, mainstream brands have been able to offer amenities and devices such as leather, wood, and anti-lock brakes, previously found only on luxury cars, as the costs decline.[97]

However, luxury vehicle sales have not collapsed as much as their non-luxury counterparts.[105][106] Luxury vehicle marques generally benefited from financially healthier dealerships, better leasing and certified pre-owned programs and loyal customers, so sales are expected to rebound more quickly than mass market cars.[74] Others note that there is growing interest in luxury vehicles from emerging markets such as China and Russia.[97]

The entry-level luxury segment has been very competitive, and there has been price-overlapping with well-equipped non-luxury cars,[107][108] for example, in Canada, several luxury manufacturers set sales records in August 2009, due mostly to aggressive incentives on entry-level luxury vehicles.[109][110] In September 2009, BMW, Mercedes-Benz, Lexus and Audi all saw their Canadian sales increase by more than 10 per cent compared to a year earlier, despite overall Canadian auto sales being down 3.5 per cent compared to September 2008. The head of Mercedes-Benz Canada suggested that the brand "has been able to attract 'middle-class' consumers even during the recession because of the sense that owning a Mercedes-Benz comes with 'membership in a club'." BMW Canada's chief said luxury cars continued to be attractive, "I think due to new product offensives and due to new design and due to the fact that we are the benchmark in all areas when it comes to fuel efficiency... that together stimulates a lot of the market".[111] BMW has managed to remain profitable in 2009 while other competitors were posting losses, by scaling down production quickly to avoid cash burn through bloated inventories.[112]

In 2010, BMW was the best-selling luxury vehicle manufacturer by sales, ahead of rivals Audi AG and Daimler AG's Mercedes-Benz marque.[112]

In Russa, NAMI began development of a new series of vehicles, designated as Unified Modular Platform, to form a basis of the state fleet and once again provide a domestic luxury brand.

See also[edit]


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