The SUV segment continues to beat out the sedan segment. So can we really blame luxury car-makers for going after what's hot?
Not like they need the help by going after SUVs. Ferrari's (RACE) recent results showed that the company is essentially sold out out of everything for the year and partially into 2019. Aston Martin sold its highest number of units since 2008. Lamborghini had record sales in 2017.
Clearly, things are going well.
These automakers don't really need to go into SUVs. But with product design teams eager to tackle a new challenge, strong financials to work with on an R&D basis and the profit potential in the new rides, why not go for it?
The most recent example of luxury automakers trending toward SUVs? Rolls Royce, which announced its all-new Cullinan SUV. If that name sounds familiar, it's because it is. It's the name of the largest diamond ever discovered.
It follows moves by other luxury names as well. Ferrari is working on a hybrid SUV for 2021, which management says will need to be the fastest SUV on the market. That's meaning it will have to faster that the Lamborghini Urus, which was introduced in December 2017, and the Bentley Bentayga. Aston Martin also recently announced a new SUV, which the automaker plans to ship with level 4 autonomous driving capability.
Worth mentioning is that, these high-end luxury makers are now following the moves made by high-end automakers like Maserati, Audi and Porsche. Their success gives even more confidence to the luxury automakers that high-end shoppers want a performance machine combined with the conveniences of an SUV or crossover.
But one that didn't wait so long? Bentley. The Bentayga was introduced in 2016 and with some SUVs not coming to market for several more years, Bentley has first mover advantage that could bode well for the automaker in terms of market share.
Also worth mentioning? The SUV offerings from Aston, Bentley, Ferrari and Lamborghini will either offer or come in fully electric and/or hybrid options.
Just like the initial SUV commitment, the move toward electrification shouldn't come as a surprise. Bentley CEO Mark Del Rosso told us as much in January, confidently sticking with the automaker's commitment to both the SUV and electrification trends. The reason why is simple: It's what customers want, Del Rosso says.
As for who these companies could hurt, the impact could be limited. Just about everyone's enjoying the SUV trend: Porsche, Mercedes, Audi, Tesla Inc (TSLA) , General Motors Company (GM) and Ford Motor Company (F) just to name a few. Heck, Ford's bailing on almost all of its cars in the next few years to focus on just trucks, cars and commercial vehicles.
That's how strong the trend is.
But don't look for Ferrari to hurt Cadillac Escalade sales or for Lamborghini to crimp demand for the Porsche Cayenne or Macan.
Even Tesla's Model X should be largely unaffected.
Why? Because these are super high-end cars. Due to Tesla's performance capabilities, it's no surprise to see a Model S or X in someone's driveway next to a Bentley or another supercar. But the pure and simple truth is that most of these brands are unattainable for most consumers.
While the Model X's starting price isn't cheap -- around $80,000 before tax credits -- it's not $200,000 to $300,000 like most of these super high-end luxury SUVs.
One could argue that these new offerings won't help Tesla by any means and that certainly may be true. But the target buyer, for the most part, is in a different category. So while a few high-end shoppers who like the Model X may instead opt for the Bentayga or the Urus, it shouldn't have too much of a negative impact on the Model X or planned Model Y crossover.
One could also make the case that increasing awareness of electric vehicles could bode well for Tesla. Only time will tell.