Barring economic catastrophe that trend will continue.Bigger Car, Bigger Expenses
When it comes to extremely priced SUVs, there is plenty of money to be made.
The simplest reason is that trucks and SUVs deliver better profit margins than sedans and coupes. Their size and prestige demands a price premium. But they also offer a wider range of pricing: you can buy the Range Rover Evoque for $41,000 or the Range Rover SV Autobiography for $200,000. By contrast, the span between variants of the BMW 3-Series sedan hovers around $20,000.
Even more significantly, the sheer size of SUVs mean they allow more opportunities for upgrades and bespoke treatments on top of their multi-layered variant range. Covering a Bentayga in a rare hue of kid leather and imported cashmere will necessarily cost thousands of dollars more than doing the same for a Continental coupe—it’s a question of size. Think of it like owning a Great Dane versus a Chihuahua: The big dog’s very existence requires a bigger kennel, a bigger collar, a bigger leash and bigger food bowls. All of which require more materials, which cost more money, and, for automakers, more profit.Status Symbol
What’s more, the shock of the high price can actually help a brand’s image, especially if it’s trying to reach thought leaders and trend-setters. Coltrane Curtis, the founder of Team Epiphany, a firm that advises companies like Nike how to appeal to young, cool creatives, said he expects the new cars from Mercedes and Land Rover to be very popular.
“They’ll sell, for the right kind of buyer,” Curtis said at dinner this week in New York. He is the mastermind behind Cadillac’s successful Public School NYC show during New York Fashion Week this past January. “I’d get one myself if I could afford it—or if I can get an approval from wifey.”
Every executive from Rolls, Bentley, Aston Martin, Lamborghini, and the rest of the lot with whom I have spoken about this in the past year has said the exact same thing. They point to (relatively) stable fuel prices, increasing global wealth (Bloomberg has discovered more than 40 new billionaires in China alone over the past two months), and the simple fact that big vehicles signify top-tier status in most countries worldwide.
In fact, they say, these elite SUVs should have come a lot sooner.
“Our customers have been asking for an SUV for years,” one exec told me privately at his marque’s SUV debut. “It’s almost like we can’t make it soon enough.”