High-end buyers are changing what they want in a vehicle. Here's why automakers are complying

Mark Phelan, Detroit Free Press on

Published in Business News

DETROIT -- What premium-vehicle buyers want is changing, and that's a big deal not just for luxury brands like Mercedes and Lexus, but Detroit 3 brands including Ford, Chevrolet and Jeep.

Premium vehicles -- including models like the Ford F-150 Platinum, GMC Yukon Denali and Jeep Grand Cherokee Overland -- account for just 13% of global sales, but 40% of automakers' profits, according to a new study by consultant McKinsey & Co. That's certainly true of the D3, which reap huge profits from the best-equipped versions of pickups and SUVs they also build in large numbers for business customers.

"Premium used to just mean high-priced," McKinsey partner Ben Ellencweig said. "Now it's high-end content people will pay extra for. It can be a German sedan or Detroit 3 pickup."

Largely thanks to those high-end pickups and SUVs, the U.S. is the world's largest market for premium vehicles, as McKinsey defines them. China's catching up fast, though. McKinsey expects China and the U.S. will tie for No. 1 around 2023.

That will change what automakers concentrate on and invest in when they develop new materials.

A roadmap to future car sales


"The U.S. and China are the markets for automakers to focus on," Ellencweig said.

Chinese buyers' top desires are:

-- The availability of electric and hybrid powertrains

-- Driving performance


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