The Lamborghini Urus and the case for super luxury SUVS



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This week, Lamborghini unveiled its new super SUV Urus. This scandalously fast, 650-horsepower, $ 200,000 off-road four-door is not the first sport utility vehicle of the famous Italian exotic automaker. That was the Hummer-esque, powered by Countach LM002 of the & # 39; 80 & & 39; 90. But that was a long time ago, long before a desire for high-end vehicles – trucks, sports cars and crossovers – made the transition from a niche market to a common one that has overtaken pbadenger cars to become the category most popular automotive. (It is now responsible for two-thirds of all US auto sales.)

It was also long before a brand like Bentley – another automaker that is, like Lamborghini, part of the VW Group conglomerate – decided that There was room in the market for an SUV that was capable of supercar acceleration, maximum supercar speeds and supercar price. The brand's Bentayga SUV, launched in the second half of last year, accelerates from 0 to 60 mph faster than a Chevrolet Corvette, reaches a top speed of 187 mph, and hosts an initial price of $ 230,000.


The LM002 was first produced in 1986.
Photo: Lamborghini

Bentley produced the Bentayga because the research showed that the vast majority of Bentley owners also had a high-end SUV in their fleet. If the brand could obtain even an incremental portion of this important business, it was thought that not only could its footprint and offers grow organically, but it would become more stable and profitable.

This same thought also occurred to Bentley's cohorts about the vehicle pyramid. Since its launch in the summer of 2016, Bentley practically has the ultra luxury SUV market almost to itself. However, in the next year or so, we will see the launch of similarly priced vehicles from brands such as Lamborghini (Urus), Aston Martin (DBX), Rolls-Royce (Cullinan), Mercedes-Benz (totally new G-Wagen, Maybach GLS), and even Ferrari (FUV without name).

"It's not surprising to see how ultra premium brands jump into the crossover car," says KBB management badyst Michael Harley. "As long as the prestigious badge is on the bonnet and the driving dynamics are adjusted to align with the reputation of the brand."

According to the marketing presentations, each of these vehicles is designed by its manufacturer to behave in the same way as the Bentayga in the global market: drastically increase or even double the sales of the brand.

But is there buyer bandwidth to accept this expansion? The global ultra luxury car market definitely grew by more than 15 percent (to around 28,000 units), driven mainly by the capricious Chinese market, where the demand for very high-end vehicles grew by a huge 54 percent. The projections remain strong for this segment in 2017 as well. But adding all these vehicles would mean half the vehicles again, or more.


The 2018 Lamborghini Urus.
Photo: Lamborghini

"The appetite for luxury SUVs, especially in China, means that if you are not in the segment very soon, you are likely to fall behind." says Dave Sullivan, product badysis manager at automotive research firm AutoPacific. "When the next slowdown hits, or if something causes a hiccup in the Chinese economy, brands without an SUV could see problems on the horizon."

But while Bentley reports that it is selling every Bentayga it can manufacture, the US market demonstrates saturation flashes. With 10 months of sales so far this year, Bentayga's sales have not coincided with the number of vehicles sold in just five months in 2016. Although sales can gain strength in the typically strong months of November and December, it is likely that the increase in sales will not be significant.

"While Bentley has seen its sales figures at the Bentayga level, the vehicle currently accounts for about half of the automaker's sales," says Harley of KBB.


The biggest problem is what is happening for the Bentley brand in general in the United States. Despite the presentation of Bentayga in August 2016, and a strong global market that hosts the highest annual vehicle sales in the history of the United States, Bentley's total sales fell in 2016. Again, although the end segment year is usually strong, at the current rate, sales are in the target to be again in 2017. Therefore, sales are not duplicated here. Are decreasing.

If we look at the other offers in the brand's portfolio, it's easy to see why: sales of the previously best-selling Continental coupe and convertible dropped almost 11 percent. Perhaps most importantly, the sales of the Flying Spur and Mulsanne sedans decreased by more than 40 percent each. Could it be that the Bentayga SUV is, instead of supplementing Bentley vehicle sales, cannibalizing sales of traditional Bentleys? Okay, the cars in Bentley's barn are at the end of their life cycle and soon they will see replacement, which can strengthen the transactions. But since the entire vehicle market is running away from SUV and SUV cars, could the decline in sedan sales be more permanent?

"The particular four-door sedan segment is under pressure," says Jeff Kuhlman, director of communications for Bentley of the Americas. "I do not think it's cannibalism, but the sedan segment is down in the whole industry, with BMW 7 Series, with Audi A8, with Mercedes-Maybach and AMG, both Bentayga and Flying Spur have a place in our portfolio and in the market , but yes, we will see some rationalization in the market ".


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If this is the case, it seems that brands like Rolls-Royce should be nervous about such an addition to their portfolio, with its equivalent luxury and improved practicality and functionality. a larger cargo area and a higher seating position, a Rolls customer can choose to buy the next $ 500,000 Cullinan instead of, in addition to, a $ 500,000 Phantom sedan.This can be especially remarkable since the SUV will share its bases, its style and probably much of its rich and exclusive interior appointments with the new four doors.

And the same will true for other brands? Ferrari manufactures a four-seater with all-wheel drive in its GTC 4Lusso hatchback grand tourer. Aston currently makes a four-seater in his Rapide. Could these vehicles suffer a similar fate when they see that their part is devoured by a crossover / SUV? Because Lamborghini does not currently produce a large car or sedan that competes directly with its crossover / SUV, producing only sports cars and super sports cars, is it possible that the brand could have a better performance with its Urus?


Photo: Lamborghini

"I think Rolls-Royce will do quite well because it will be in a separate clbad, but each of these brands and offers is quite unique, it is difficult to stereotype the entire ultra-luxury segment", says Sullivan. "We see more diversification in the ultra luxury segment than ever before, there will still be room for coupes and sedans, but prestigious prospectors now demand an SUV."

Continues to proclaim a mutually badured type of automobile destruction. "Of course, there is a risk of cannibalization of the rest of the alignments for each automaker, but there is also the risk of complete cannibalization by the competition without adding an SUV to their lineup."

And part of it could also work through time. "In this segment, anyone who has a new product is a great benefit," says Kuhlman of Bentley. "This segment is particularly sensitive to that, they want the best."

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