Luxury car dealers are raising prices for luxury SUVs to try to stay competitive with luxury buyers
Luxury cars, luxury minivans and even luxury apartments are all in a frenzy as the industry scrambles to keep up with a surging demand for SUVs.
But some of the companies that make them are taking things a step further, raising prices and reducing warranties on their cars and SUVs in an effort to keep their vehicles from falling behind.
The moves by some of these luxury brands, including Mercedes-Benz, Nissan and BMW, are part of a broader effort to help keep demand high in a market where luxury cars are increasingly valued by buyers.
Luxury automobile companies, such as Mercedes-Bundesliga, BMW, and Porsche, say they are raising the cost of luxury SUV warranties by as much as 50 percent.
The cost of a Mercedes-BMW 3.0-liter turbocharged diesel V6, for example, has increased by 50 percent from its base price of $43,700.
Mercedes-Brand says its premium sedan, the A-Class, will now cost $46,700 from its original $44,400.
The premium SUV, the C-Class model, will go up to $53,100 from $45,100.
Porsche is also lowering the price of its premium SUV.
The new cost of warranties for luxury cars and minivanks is part of an overall push to keep luxury demand high, analysts say.
Some luxury brands say they need to be more efficient, as they are trying to make their cars more fuel-efficient and reduce their carbon footprint.
But analysts say the cost increases for some vehicles are driven by the companies’ desire to keep the cars selling.
In a statement, Mercedes-brand said it will not offer any new premium SUVs or minivanes for two years, and that it would also lower its warranty coverage on its luxury cars by $50,000 to $60,000.
It also said that it will continue to offer its C-class sedan for $46 of more than $53K, a $1,200 increase.
Nissan says it will lower its car warranty coverage to $50K from $52,000 and its minivan warranty to $75,000 from $100,000 for two-year warranties.
BMW said it would lower its insurance coverage to 10,000 Euros from 15,000 euros and its C90 SUV to $100K from the current $200K.
It’s unclear what kind of price reductions the luxury car companies will implement.
The industry is already trying to diversify by offering premium minivank vehicles in the US and Europe.
And some luxury automakers are expanding their vehicles with a variety of technologies.
For example, the Cadillac CTS luxury sedan will now be offered in a range of technologies including electric, hybrid and plug-in hybrids.
But the automakers that make luxury vehicles have not offered a price for SUVS for quite some time.
In fact, luxury car makers have been reluctant to offer SUVs because of a lack of demand and cost concerns.
This is why they are making such drastic moves, analysts said.
While the luxury SUVS are not yet in the same stratosphere as the premium minis, analysts argue that luxury car dealerships and luxury minivan manufacturers are going too far.
“If they can keep the prices for SUV SUVs up, I think the industry is on the right track,” said Jim Wunderlich, chief executive of Kelley Blue Book.
Wunderlich said the increased costs are the result of luxury automakers and luxury car manufacturers’ inability to keep pace with demand and therefore must continue to make changes to keep prices high.
If they could keep the price for SUV SUVs high, then the industry would be doing more to drive demand, he said.