Who Schooled Who? In The High End SUV Market for 2006?

Part of successfully marketing is knowing exactly what the customer wants and needs.

In theory if you do your homework and target the core market for your product, you retain a larger percentage of them if a downturn occurs. But does this always happen?

A case in point has been the recent fluctuations in gasoline prices that spurred a wholesale massacre in the SUV market for everyone. Right?

Well, not for all of the makers it seems. With GM, Ford and Chrysler suffering massive losses in sales in that critical segment, a few of the premium and luxury makers actually continued with business as usual and avoided losing critical market share. This may have been due to them being tuned into their core segments better than the competition, and making sure the benefits of owning, outweighed the temporary rise in expenses. Simply put, if you make the ship desirable enough the rats won’t jump as soon.

But being a premium maker does not necessarily exclude you from losing market share.

While the overall sector held steady with almost a 3.5% gain in sales last year, BMW suffered a drop of 15% in its SUV (SAV) sales primarily due to fuel prices, followed by supply issues later in the year.

Releasing a new mammoth SUV at the height of gas price is a recipe for disaster? Don’t tell that to Audi, they did just so and averaged an impressive 293% gain at year end in sales after the first full month sales for the Q7. They simply knew their audience better and the desire to own a new Q7 far outweighed the costs. Taking Audi out of the equation, Mercedes continued forward with a staggering 67.66% gain in 2006. Distancing themselves from the pack by quite a margin.

While Lexus capped off an incredible year in 2006. Their SUV models took a lesson in the school of hard knocks and suffered an 8% decline in sales for the year. Lexus tends to cast a wider net than most, and may have suffered more from an audience that was more sensitive to gas prices, but even with the sole hybrid maker in the bunch fail to sustain their growth in the segment.

Source: Automotive News