ConsumerInsights Analyzed Competition Dynamics at the Point of Purchase Among Premium Car Brands
- Genesis topped the market share last year, followed by BMW and Mercedes-Benz
- Genesis emerged as the clear winner, with 2 out of 3 customers choosing it over imports
- Audi has distanced itself further from the top-tier group as its market share declined
- Volvo’s growth doubled in four years, as Lexus bounces back from No-Japan boycott
- Genesis played a key role in boosting the premium cars’ market share to 25% from 18% just in 2 years
○ The premium car market is shaping up to be a ‘One-top, Two-Strongs’ competition with Genesis in the lead. Genesis showed remarkable growth, while Mercedes-Benz and BMW also consolidated their ‘Two Strongs positions. Following that, Volvo showed noticeable gains amidst the decline of Audi and Lexus, diversifying the competition.
○ In the annual automotive-syndicated study ConsumerInsight conducted last year, recent new car buyers were asked about the cars they compared until the last minute of the purchase. Based on this, ConsumerInsight compared the competitive dynamic between brands among recent premium car buyers (July 2021-June 2022 purchases, n=1,148) who thoroughly evaluated their options before finalizing their choice.
■ Genesis consolidates its throne in the premium market
○ The findings of the 2022 study revealed that Genesis emerged as the leading premium brand, chosen by one in three buyers (32.1%). Following behind were BMW (22.6%) and Mercedes-Benz (20.1%), both chosen by approximately one in five buyers. Considering the combined market share of these three brands, they accounted for a substantial 74.8%, representing approximately three out of every four premium cars[Figure].
□ Genesis sales have experienced consistent growth since 2020, particularly with the introduction of new models. In 2021, the brand achieved a significant milestone by surpassing 100,000 units sold for the first time, reaching approximately 138,000 units. These sales figures have been maintained at a similar level in the following year. This achievement can be attributed to several factors, including the brand`s commitment to excellent product quality and its competitive pricing compared to imported premium counterparts.
○ In addition to its significant market share, Genesis has demonstrated a competitive edge at the point of the final decision. A substantial 70.6% of consumers who compared Genesis to BMW chose Genesis as their preferred option. Similarly, when comparing Genesis to Benz, six in 10 (62.8%) consumers favored Genesis. Ultimately, among customers who were faced with a decision between "Genesis-Benz" or "Genesis-BMW," two out of three (66.5%) chose Genesis. Furthermore, when compared to other premium brands like Audi, Volvo, and Lexus, consumers displayed a similar preference for Genesis. These findings underscore Genesis` strong appeal and success at purchase, solidifying its position in the premium market.
□ In the brand comparison set, Genesis was chosen by customers over Volvo at 73.9%, Audi at 73.6%, BMW at 70.6%, and Lexus at 56.8% in the order of highest.
■ Competition intensity between Benz and BMW at 50:50
○ The rise of Genesis has weakened the rivalry between Benz and BMW, but the competitive landscape between the two brands remains largely unchanged. The comparison set still holds the top position among premium brand pairs with a share of 14.9%. Mercedes-Benz was chosen by 7.5% of buyers, closely followed by BMW with 7.4%, resulting in close competition between the two.
□ Audi has been moving away from the center of competition, as Genesis, Mercedes-Benz, and Lexus buyers compared more with Volvo rather than Audi at the final stage of the purchase process. However, Audi`s sales, which experienced a significant decline after the `Diesel Gate` scandal, have rebounded thanks to the aggressive sales strategy. Volvo, in particular, has performed well in competition against Mercedes-Benz and BMW, benefiting from the ‘safety’ image. Additionally, Volvo`s market share has doubled over the course of four years, while Lexus is recovering from the impact of the ‘No-Japan’ boycott.
■ Car prices escalate as premium car market expands
○ Despite various issues, such as the pandemic and shortage of automotive semiconductors, the premium car market has grown remarkably over the past two years. According to ConsumerInsight’s annual automobile syndicated study, the percentage of those who bought a new premium car in the past year was 25%. This represents a significant increase, accounting for a growth rate of 1/3 or more since 2020, when the figure stood at 18%. (reference: The purchase price of domestic cars rose by 30% while imported cars increased by 20%).
○ Genesis has successfully captured the demand for premium cars with its good exterior design and value for money. In addition to expanding the market and displacing imports, it has also undeniably driven up the average purchase price of cars. With a 25% share of premium cars, which is one of the highest in the world, Korean consumers’ preference for bigger and more luxurious cars continues to grow. In addition to forecasting the market outlook and competitive landscape, it is also necessary to think about the culture of rational automobile consumption.