GMC unveiled its redesigned mid-sized 2018 Terrain, following an industry trend toward heavily optioned models.Jeffrey Sauger
It's no secret that SUVs and crossovers rule the market in North America, accounting for about half the sales in the United States and almost as much in Canada.
In fact, much of the action is at the top end as low interest rates, combined with loans of up to eight years , tempt buyers to more heavily optioned models.
"There's a general movement towards wanting the creature comforts and the technology that goes with the higher models," Mike Sparanzini, brand manager for GMC and Buick in Canada, said in an interview.
That was evident at this year's North American International Auto Show, where GMC unveiled its redesigned mid-sized 2018 Terrain, coming this fall. The top-line Denali – the current version starts at about $43,000 – could account for a quarter or more of sales if it tracks current trends.
Meanwhile, Chevrolet showed a new Traverse featuring a new High Country trim package above its current Premier edition that stickers at almost $53,000.
And Audi pulled the wraps off a Q8 plug-in hybrid full-size SUV that will head for production later this year and slot above the $74,000 Q7. Mercedes-Benz rolled out a face-lifted entry GLA compact SUV (current model, $38,000).
SUV/crossovers dominated the list of the top 15 best-selling luxury models last year, according to statistics compiled by website Good Car Bad Car. Yes, the Mercedes C-Class sedan was No. 1 for much of the year but, after that, only the BMW 3 Series cracked the top 15.
The Audi Q5 (starting around $54,000), Acura RDX ($42,000), Lexus RX ($56,000) and BMW X5 (roughly $66,000), all compact or mid-sized, were the top sellers.
If you limit the search to models priced at more than $50,000, it's all SUVs and crossovers, starting with Lexus RX and BMW X5, and a heavy presence of Detroit iron: the Chevrolet Tahoe ($54,000), its sibling GMC Yukon ($55,000) and Yukon XL ($58,000), and Chevy Suburban ($57,000).
A Yukon Denali starts around $79,000 while the XL Denali begins at $82,000. And, as Sparanzini noted, Denali models make up 24 per cent of GMC sales in Canada.
Cadillac's compact XT5 ($45,000) – 12th on Good Car Bad Car's premium list – and its full-size Escalade ($84,000) had record Canadian sales in 2016, managing director Mahmoud Samara said. It wants to expand its three-model SUV lineup as soon as 2018.
For instance, Samara said, Cadillac does not have a small luxury SUV to compete with BMW's X1, the Mercedes GLA or Audi Q3.
"Customers attracted to those vehicles are the urban city customers, which is where the growth is coming from," Samara said.
Canadians have developed a taste for luxurious goods despite economic uncertainties, Samara said. They've been helped by sustained low-interest, long-term financing availability that offers relatively manageable monthly payments for higher-priced vehicles, and relatively low fuel prices that don't penalize heavier SUVs as much.
This taste for luxury is also partly spurred by the influx of money brought by affluent new immigrants, he said. In Vancouver, for instance, Escalade sales grew 42 per cent last year, making it No. 1 in the full-size luxury SUV segment, ahead of Mercedes.
"A lot of manufacturers have identified the same opportunities, hence a lot of the entries have been in the SUV and crossover segments," Samara said.
"The winning formula for us is how do we clearly differentiate our product substance and brand positioning from mainly the German competitors, namely BMW, Audi and Mercedes?"
Sparanzini said that in a crowded luxury marketplace it's essential that brands have attributes that appeal to their target audiences. Buick's range of SUV/crossovers, Encore, Envision and Enclave, are aimed at educated, affluent women, providing a peaceful "almost like a spa-like reward."
Sign up for our newly-designed weekly newsletter
Like us on Facebook
Follow us on Instagram and Twitter
Some of the most interesting cars on display at the Detroit auto show aren't exotic hypercars. They're offerings like the new Ford F-150 and the retro-riffic VW I.D. Buzz.