Model 3 reveal effect on other luxury car sales

[Red Sage]

The Alfa Giulia and Jaguar XE are direct Model 3 competitors.

The rest are large or larger cars.

The Acura RLX is a tenth inch larger than Model S.

Even though Lincoln MKZ is based on the "midsize" Fusion it is within two inches of Model S.

The Cadillac CT6 is a whopping 204"(8" longer than Model S) long and has a base price of $54k. Cadillac's compact, ATS, and midsize car,CTS, are properly represented on the list.

Yadda, yadda, yadda, and a big fat 'DUH'... I could point to plenty of vehicles in the existing list that I would ordinarily remove. However...

When I asked for clarification, @RubberToe replied with, "...vehicles chosen are deemed to be in the rough MSRP range of the Model 3."

Per the EPA, the Cadillac ATS is indeed Compact -- just as are the A4, 3-Series, and C-Class. I am certain the EPA will put the Model ☰ in the Midsize class by usable volume for passengers and luggage, which I expect to be over the 110 ft³ threshold for the car. The Infiniti Q50 and Alfa Romeo Giulia are both Midsize cars too, but will undoubtedly be direct competitors to Model ☰. The Lincoln MKZ is similarly classified as Midsize (115 ft³ total). Guess what? So is the Acura RLX -- Midsize at a combined interior volume of 117 ft³. The BMW 5-Series and Mercedes-Benz E-Class each are classified as Midsize. Heck, the Lexus LS is Midsize (117 ft³) -- and even when you order the extended wheelbase 'L' version it is still Midsize. This official EPA size classification has NOTHING to do with the LENGTH of a car.

Thus...? If German cars that have a starting price over $50,000 can be included, then surely American cars at the same price point can be considered as potential 'competitors' for cross shoppers to peruse. Large cars are at 120 ft³ or larger in combined interior volume. The rear wheel drive Cadillac CT6 starts at $53,795. The front wheel drive Cadillac XTS starts at $45,595 -- $400 less than the Cadillac CTS that is already on the list. And the Chrysler 300 has a current starting price of $32,340 per their website, with trim levels ranging up to $42,770 -- thus within the range of the Model ☰ MSRP -- since it will start at $35,000 and Elon Musk said he expects the Average Sale Price to be $42,000.

So, for the purpose of comparing cars within the proposed (admittedly rather wide) price range of the Model ☰, these cars are all perfectly fine for the exercise at hand.

 

[Red Sage]

@RubberToe -- I took the time to look up those cars I mentioned, so that you wouldn't have to wrangle their pricing and U.S. Sales Data yourself. I hope this helps!

Acura RLX $33,000
________ JAN ___ FEB ___ MAR ___ APR ___ MAY ___ YTD ___ TOTAL
2016 ____ 98 ___ 103 ___ 130 ___ 156 ___ 127 ___ 614 ___ 1,478
2017 ____ 80 ___ 103 ___ 110 ___ 106 ____ 82 ___ 481 ___ ---

Alfa Romeo Giulia $37,995
________ JAN ___ FEB ___ MAR ___ APR ___ MAY ___ YTD ___ TOTAL
2016 ___ --- ___ --- ___ --- ___ --- ___ --- ___ --- ______ 36
2017 ____ 70 ___ 412 ___ 484 ___ 634 ___ 883 ___ 2,482 __ ---

Buick LaCrosse $32,065
________ JAN ___ FEB ___ MAR ___ APR ___ MAY ___ YTD ____ TOTAL
2016 ___ 4,057 _ 2,643 _ 2,275 _ 1,813 _ 1,687 _ 12,475 _ 27,582
2017 ___ 1,307 _ 1,348 _ 2,330 _ 1,983 _ 3,183 _ 10,151 __ ---

Cadillac CT6 $53,795
________ JAN ___ FEB ___ MAR ___ APR ___ MAY _____ YTD ___ TOTAL
2016 ___ --- ___ --- ____ 35 ___ 285 _____ 697 ___ 1,017 _ 9,169
2017 ___ 634 ___ 802 ___ 968 ___ 978 ___ 1,001 ___ 4,383 _ 4,383

Cadillac XTS $45,595
________ JAN ___ FEB ___ MAR ___ APR ___ MAY _____ YTD ___ TOTAL
2016 ___ 1,813 _ 1,813 _ 2,247 _ 1,521 _ 1,209 ___ 8,603 _ 22,171
2017 ___ 1,849 _ 1,345 _ 1,484 ___ 914 ___ 778 ___ 6,370 __ ---

Chrysler 300 $32,340
________ JAN ___ FEB ___ MAR ___ APR ___ MAY ___ YTD ____ TOTAL
2016 ___ 4,634 _ 4,809 _ 6,474 _ 5,570 _ 5,598 _ 27,085 _ 53,241
2017 ___ 4,708 _ 5,386 _ 4,969 _ 3,948 _ 3,907 _ 22,918 __ ---

Jaguar XE $35,725
________ JAN ___ FEB ___ MAR ___ APR ___ MAY ___ YTD ___ TOTAL
2016 ___ --- ___ --- ___ --- ___ --- ___ 598 ___ 598 ___ 6,656
2017 ___ 693 ___ 993 ___ 1,336 _ 742 ___ 764 ___ 4,528 __ ---

Lincoln Continental $44,720
________ JAN ___ FEB ___ MAR ___ APR ___ MAY ___ YTD ___ TOTAL
2016 ___ --- ___ --- ___ --- ___ --- ___ --- ___ --- ___ 5,261
2017 ___ 1,167 _ 1,079 _ 963 ___ 1,003 _ 1,061 _ 5,273 __ ---

Lincoln MKZ $35,170
________ JAN ___ FEB ___ MAR ___ APR ___ MAY ___ YTD ____ TOTAL
2016 ___ 1,946 _ 2,128 _ 2,480 _ 2,129 _ 3,250 _ 11,933 _ 30,534
2017 ___ 2,090 _ 2,074 _ 2,479 _ 2,658 _ 2,801 _ 12,102 __ ---​

Let me know if you find this list confusing.

 

[MikeDog77]

Thanks again for this report. There are a lot of cars and I know it can be confusing, but for me if you want to oversimplify, look at the BMW 3 series. Why, because personally I would be buying one if not for Tesla. And Tesla calling it a 3 has a lot more to do with BMW than it does SEX. (Just like S-class and S). And the fact that it was down 14% in 2016 and now another 13.5% so far this year... All I can say is WOW. That said the German automakers are scared and adjusting in my opinion faster than the American car companies are.

 

[FlatSix911]

Tesla surpasses BMW to become the 4th most valuable car company in the world

Over the past few months, Tesla’s valuation surged past Ford and GM but following another surge over the past 2 weeks, Tesla’s market capitalization is now worth more than BMW’s. It is now the 4th most valuable car company in the world.

Despite Tesla’s current small size, maybe BMW should worry. Facebook millionaire turned venture capitalist Chamath Palihapitiya recently suggested that the Model 3 is already stealing sales from the 3-Series even before they start deliveries:

 

[R.S]

Tesla surpasses BMW to become the 4th most valuable car company in the world

Over the past few months, Tesla’s valuation surged past Ford and GM but following another surge over the past 2 weeks, Tesla’s market capitalization is now worth more than BMW’s. It is now the 4th most valuable car company in the world.

Despite Tesla’s current small size, maybe BMW should worry. Facebook millionaire turned venture capitalist Chamath Palihapitiya recently suggested that the Model 3 is already stealing sales from the 3-Series even before they start deliveries:

View attachment 230659

Well, I do think that the Model 3 will steal some 3 series sales, but I think it's wrong to look at the sales numbers and make out the Model 3 as the main cause.

We know sedan sales are declining everywhere. Mostly in favor of SUVs, or hatchbacks. I do think especially the 3 series , the C-Class and the A4 will be affected by the 3, but also by other products.

The A4 increased sales in 2016 and it seems like this year will be another record year. With monthly sales in 2017 always being higher than a year before. So is BMW affected, but Audi not?

To surmise: of course the Model 3 will have an effect on entrance level luxury sedan sales. But just looking on sales data of one particular competitor won't tell the whole story.

 

[zenmaster]

I very much doubt people would hold off buying cars for 2 years.
And you can't say any drop in sales is due to Model 3 - it is probably more related to economic climate.

The only way you can conclude that Model 3 is taking sales away from other brand is to wait for sales numbers in 2018 and 2019.
A drop is sales in other brands in association of the rise in sales in Tesla would give you stronger evidence of Model 3 effect.

Why is this not plainly obvious?

 

[N5329K]

I would agree that never needing to stop at a gas station is a luxury, and early Priuses definitely robbed sales from more upscale brands, but the OP's "other luxury cars" query seems to assume that the Model 3 is a luxury car. Is it really?
Robin

 

[mmd]

This is complete speculation. The only known survey done on this indicates that model 3 reservation holders are mostly coming from Toyota/Honda buyers, not BMW or other luxury car buyers.
Model 3 Reservation Holder Survey Underlines Tesla's Mass Market Challenge - DailyKanban

Surprisingly, Tesla’s new batch of potential customers turn out to be predominantly “average joes” who own mainstream cars like the Toyota Camry, rather than existing electric car or luxury car owners. This represents a sharp contrast from Tesla’s existing business: the Model 3 reservation holders polled are more than twice as likely to own a Toyota as any other brand, whereas current Tesla owners are four times as likely to own a BMW than any other brand. Similarly, Model 3 reservation holders area most likely to purchase or lease a Toyota in the next 12 months if a Tesla Model 3 is not available. This appears to be tied to income levels: only 37% of Model 3 reservation holders made over $100,000 in household income in 2015, compared to 63% of BMW owners. Moreover, a significant portion of Model 3 reservation holders report a household annual income of between $25,000 and $49,000 in 2015, whereas no BMW owners reported earning less than $50,000 in 2015.

 

[RobStark]

The A4 increased sales in 2016 and it seems like this year will be another record year. With monthly sales in 2017 always being higher than a year before. So is BMW affected, but Audi not?

Because Audi's calling card is luxury interiors while BMW's is performance?

Model 3 is expected to have better performance than 3 Series for the same price but not a more luxurious interior than A4?

 

[RobStark]

Is it really?

Yes.

There are two potential industry categories.

1)Entry level luxury car(which includes sports sedans).

2) Zero emission green car/science experiment.

We want Model 3 placed in category one. When automotive journalist do comparos we want them to compare to A4,C Class, 3 Series etc not relegate it to the green car ghetto and compare vs Bolt, LEAF 2.0, Clarity Trio etc.

Arguing that Model 3 belongs in its own category of one in an entry level econo-high performance-zero emission category puts it functionally in category 2. We want people who research entry level luxury cars or competitors to their first choice entry level luxury car to run into comparisons with Model 3.

 

[R.S]

Because Audi's calling card is luxury interiors while BMW's is performance?

Model 3 is expected to have better performance than 3 Series for the same price but not a more luxurious interior than A4?

That is a bit far fetched. I'd rather argue that in September 2015 a new A4 was revealed, while the 3 series is 4 years older.

Like I said, there will be an influence on the luxury car market, but there are way too many variables, SUVs, other competitors etc., to really pin it down.

 

[alevek]

Will have absolutely zero affect. However may have a small effect...

 

[Trips]

That is a bit far fetched. I'd rather argue that in September 2015 a new A4 was revealed, while the 3 series is 4 years older.

Like I said, there will be an influence on the luxury car market, but there are way too many variables, SUVs, other competitors etc., to really pin it down.

If it was the A4, starting in Sept 2016 you should have started to see a few increases in sales. Starting in September 2015 is when the decline started and that was around the time that more details starting coming out about the Model 3.

Looking at same month sales for the BMW 3 & 4.
2015
Jan - Increase
Feb - Increase
March - Increase
April - Increase
May - Increase
June - Increase
July - Decrease
Aug - Increase
Sept- Decrease
Oct - Increase
Nov - Decrease
Dec- Decrease

2016
Jan - Decrease
Feb - Decrease
March - Decrease
April - Decrease
May - Decrease
June - Decrease
July - Decrease
Aug - Decrease
Sept - Decrease
Oct - Decrease
Nov - Decrease
Dec - Decrease

2017
Jan - Increase
Feb - Decrease
March - Decrease
April - Decrease
May - Decrease

 

[N5329K]

Yes.

There are two potential industry categories.

1)Entry level luxury car(which includes sports sedans).

2) Zero emission green car/science experiment.

We want Model 3 placed in category one. When automotive journalist do comparos we want them to compare to A4,C Class, 3 Series etc not relegate it to the green car ghetto and compare vs Bolt, LEAF 2.0, Clarity Trio etc.

Arguing that Model 3 belongs in its own category of one in an entry level econo-high performance-zero emission category puts it functionally in category 2. We want people who research entry level luxury cars or competitors to their first choice entry level luxury car to run into comparisons with Model 3.

I agree that it would be best if the Model 3 could go head to head with those other entry-level luxury cars. I'm not convinced it hit that mark, however. The exterior is very strong. The interior might not be (and that's where you spend your time). The 3 is clearly more than a science experiment, but seems less than the BMW/Audi/ C Class competition. Call it a stylish, upgradeable Bolt with supercharger access and no onerous GM dealership contact needed, which might make it a category of one.
That's not to say it won't steal business from entry-level (or higher) luxury marques. The Prius clearly did.
Robin

 

[dsvick]

This is complete speculation. The only known survey done on this indicates that model 3 reservation holders are mostly coming from Toyota/Honda buyers, not BMW or other luxury car buyers.
Model 3 Reservation Holder Survey Underlines Tesla's Mass Market Challenge - DailyKanban

I don't know that I'd put a lot of faith into a survey that only interviewed .2% of the reservation holders. Especially when you have no idea of the survey methodology or the actual questions asked.

 

[Red Sage]

Well, I do think that the Model 3 will steal some 3 series sales, but I think it's wrong to look at the sales numbers and make out the Model 3 as the main cause.

We know sedan sales are declining everywhere. Mostly in favor of SUVs, or hatchbacks. I do think especially the 3 series , the C-Class and the A4 will be affected by the 3, but also by other products.

The A4 increased sales in 2016 and it seems like this year will be another record year. With monthly sales in 2017 always being higher than a year before. So is BMW affected, but Audi not?

To surmise: of course the Model 3 will have an effect on entrance level luxury sedan sales. But just looking on sales data of one particular competitor won't tell the whole story.

Well, that's why this thread was created -- to look at the steadily faltering sales of multiple potential competitors to Model ☰ in the wake of its initial unveiling. And sure, AUDI A4 U.S. sales went up in 2016 by a whopping huge 16.2%... To an 36,987 unit amount that is still only 52.5% of BMW 3-Series U.S. sales that year -- when that car was down 25.5% from the previous year. For further comparison, the AUDI A4 only moved 31,831 units in 2015, while the 3-Series had 94,540 takers in the U.S. So the A4 was only able to manage 33.7% of 3-Series sales in 2015. This isn't a case of the A4 rising so quickly, so much as it is that the 3-Series fell off a cliff -- which happened with a new version launching as a 2017 model. That's why, for like the first time in recent memory (like, most of the past 40 years) Mercedes-Benz C-Class (or MB anything, really) was able to outsell the 3-Series -- in a year when the C-Class itself was DOWN by 10.4% in sales overall to 77,167 units. Here, have a look for yourself...

2016 Year End U.S. Passenger Car Sales Rankings - Top 165 Best-Selling Cars In America - Every Car Ranked - GOOD CAR BAD CAR

If you are wondering why the AUDI A4 is doing better, if not necessarily great... See what Car and Driver think of it...

2017 Audi A4 - First Drive Review

The only car in class they rank higher is the newcomer, the Alfa Romeo Giulia. And pretty much no one even knows about that car, so it barely sells at all. The BMW 3-Series, once the proud banner holder at the top of Mt Olympus, untouched by mere mortals as the undisputed King of ICE... Is now at #5. Bested on all sides in the very category of vehicles it had come to define, and had until 2016, dominated in sales somehow, even though comparison tests to competitors repeatedly have shown it was lacking since 2012, no longer the 'benchmark' it was in times past. I think people are expecting big things from the Tesla Model ☰. The good news is that they will get precisely that.

 

[Red Sage]

This is complete speculation. The only known survey done on this indicates that model 3 reservation holders are mostly coming from Toyota/Honda buyers, not BMW or other luxury car buyers.
Model 3 Reservation Holder Survey Underlines Tesla's Mass Market Challenge - DailyKanban

Dude. You can no more trust [DELTA KILO] than you can [SINKING ANCHOR].

 

[kevin457]

"Coming from" is also not very indicative of what someone would be buying if the Model 3 did not exist. People fresh out of college rarely get a luxury/premium car, and will drive a cheaper one until they can afford the real car they want. We should expect a large number of people buying any 35k starting car would be trading up from a cheaper one.

 

[jbcarioca]

This is complete speculation. The only known survey done on this indicates that model 3 reservation holders are mostly coming from Toyota/Honda buyers, not BMW or other luxury car buyers.
Model 3 Reservation Holder Survey Underlines Tesla's Mass Market Challenge - DailyKanban

I don't know that I'd put a lot of faith into a survey that only interviewed .2% of the reservation holders. Especially when you have no idea of the survey methodology or the actual questions asked.

Not only that but there is zero methodological information. I know of no sound study. From the people in the queue I was in on the first day, and the vehicles they came in, I strongly suspect the 'survey' must have been carefully designed to choose the last likely people to choose a Tesla. That said, there is zero doubt that lots of Prius and Leaf owners made reservations. Prius at the outsell also had very high demographics, that gradually normalized after a year or two. It seem to me Model 3 will begin with unusually high demographics fro it's price pint, then gradually normalize of a couple of years also.

We'll know the truth of it within a year or so. Then we can come here again and debate the matter.

regardless we all know Tesla must have raised it's own QC, service and infrastructure by the proverbial "quantum leap" with Model 3. We just don't know how close they have come to that lofty goal.

 

[Red Sage]

That is a bit far fetched. I'd rather argue that in September 2015 a new A4 was revealed, while the 3 series is 4 years older.

Like I said, there will be an influence on the luxury car market, but there are way too many variables, SUVs, other competitors etc., to really pin it down.

And in 2016 the 2017 3-Series launched. Sometimes, in the U.S., there might be a slight lag in sales the year a new version debuts. The 3-Series dropped by 25.5% over 2015. Not a 'slight' amount at all, but a devastating one, because it allowed the Mercedes-Benz C-Class to take the #1 spot in the U.S. despite selling 10.4% fewer vehicles than the year before, when the 3-Series outsold the A4 by 62,709 units instead of only 33,471 in 2016.

It doesn't matter how many variables there are. Every vehicle on the market competes against every other on the market. On that same level playing field, some cars that are direct competitors to each other are more successful on a consistent basis at actually selling cars. In the arena of vehicles that has long been defined by the BMW 3-Series, it no longer leads in sales. Nothing achieved by any of its direct competitors suggests that they made a move up to take sales away from 3-Series. the only significant factor is the upcoming competitor, the Tesla Model ☰ -- which got hundreds of thousands of interested potential customers within a couple of weeks during 2016.

Oh, then there is this...