Launch SUV – The overall trend for high-end automakers

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The Lamborghini Urus have confirmed that they will launch the new family friendly SUV in 2017.  Lamborghini CEO Stephen Winkelman suggested that it was the automaker’s “expectation” to launch the SUV and the luxury SUV, as it is anticipated that the SUV market is will grow substantially over the next few years.

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As a traditional high end luxury sports car manufacturer, Lamborghini is in famous of producing super fast sports car. At FY 2014, the company has sold 2,530 units across the world.

Lambo sales

Entering the SUV market provides Lamborghini with a truly incremental opportunity to drive sales by offering innovative products outside of their legacy product offering. Increasing their product portfolio will in turn increase their target customer base, providing them with wider distribution and appeal amongst automobile consumers.

Lamborghini have recognized the success of their sister brand Porsche (Cayenne and Macan) having entered into the SUV market, (Porsche Sold 45,000 Macan SUVs Last Year, Reports 17.2 Billion Euro Revenue) setting a precedent on how product diversification can take a brand from strength to strength. Bentley, also sister brand to both Lamborghini and Porsche, have announced their plans to enter the SUV market in 2016. Market share for the taking, leveraging the strength of brand equity paired with product innovation to entice consumers.

Although deemed a great opportunity to increase business, one must look to the potential headwinds. Diversification with regard to product range/offering brings a number of challenges. Brand perception, specialist product knowledge, and dilution of the brand core value. That being said, with the right plan in place all of these potential headwinds should be easily overcome with a solid commercial strategy paired with optimized back office support.

Will this strategy take these giants to the next level? Will other brands follow foot such as Ferrari?

Only time will tell….

http://www.autoevolution.com/news/porsche-sold-45000-macan-suvs-last-year-reports-172-billion-euro-revenue-93241.html

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16 thoughts on “Launch SUV – The overall trend for high-end automakers

  1. A good finding about Lamborghini into SUV market as a Product Diversification strategy from Ansoff Matrix (Ansoff, 1957 pp. 113-124). The following two figures will help you for the reflective essay by connecting the Ansoff matrix with Sales strategies focused on Customer acquisitions.

    You can also look at a slightly modified Matrix as below:
    http://xtra.strategypal.com/audit/internal-process-questions/customer-acquisition/

    But do you think diversification will not affect Brand equity of Lamborghini. Shouldn’t it rely on market capture through sister brands?
    “Maybe for Lamborghini lower level of diversification would improve the match between the company’s core competencies and environmental opportunities and threats” (Openlearningworld.com). It can maintain a consistent image as a sports car manufacturer. (Paradox being Lamborghini was originally a Tractor Manufacturer)!
    References: Ansoff, I.: Strategies for Diversification, Harvard Business Review, Vol. 35 Issue 5,Sep-Oct 1957, pp. 113-124
    Openlearningworld.com,. ‘Diversification Strategies’. N.p., 2015. Web. 29 Apr. 2015.

    Xtra.strategypal.com,. ‘Customer Acquisition | Xtrapal’. N.p., 2015. Web. 29 Apr.

    Hope you have some good stuff to think about further
    Cheers,
    Saurabh Pandit

    Liked by 1 person

  2. A good finding about Lamborghini into SUV market as a Product Diversification strategy from Ansoff Matrix (Ansoff, 1957 pp. 113-124). The following two figures will help you for the reflective essay by connecting the Ansoff matrix with Sales strategies focused on Customer acquisitions.

    You can also look at a slightly modified Matrix as below:
    http://xtra.strategypal.com/audit/internal-process-questions/customer-acquisition/

    But do you think diversification will not affect Brand equity of Lamborghini. Shouldn’t it rely on market capture through sister brands?
    “Maybe for Lamborghini lower level of diversification would improve the match between the company’s core competencies and environmental opportunities and threats” (Openlearningworld.com). It can maintain a consistent image as a sports car manufacturer. (Paradox being Lamborghini was originally a Tractor Manufacturer)!
    References: Ansoff, I.: Strategies for Diversification, Harvard Business Review, Vol. 35 Issue 5,Sep-Oct 1957, pp. 113-124
    Openlearningworld.com,. ‘Diversification Strategies’. N.p., 2015. Web. 29 Apr. 2015.

    Xtra.strategypal.com,. ‘Customer Acquisition | Xtrapal’. N.p., 2015. Web. 29 Apr.

    Hope you have some good stuff to think about further
    Cheers,
    Saurabh Pandit

    Liked by 1 person

  3. i feel that the diversification will affect the brand image of the company, they should do what they do best and manufacture sports cars rather than entering another segment and rely on their sister companies to capture the market

    Liked by 1 person

  4. I feel as though it is one of those situations where if it’s not broken don’t fix it. Lamborghini are sport car master’s and I highly doubt that there target market will be seeking a SUV. The same situation is happening at other luxury brands such as Louis Vuitton who are trying to grow their fine jewellery range. When I personally think of Louis Vuitton, I don’t think of buying a engagement ring their and same goes with Lamborghini, when I think Lamborghini I do not think SUV.

    Liked by 1 person

  5. @tessad@tessa thanks for mentioning about Louis Vuitton! There is an interesting blog on LV coming tomorrow that you would love to comment on….

    Liked by 1 person

  6. Entering the SUV market,Lamborghini may recognise there is a consumer group who are hot on buying the luxury brand product but not the real costly one, it is a potential segment. In comparison to traditional luxury sports cars, the price of SUV is rather low such as Porsche Cayenne (AUD10,000-AUD15,000) and Porsche 911(AUD30,000-AUD40,000). However, I gather Lamborghini has been a little late to get into this segment, especially in Chinese market who is one of the new luxuries leaders, the growth in demand for larger luxury vehicles has declined significantly since 2014. A related link is as below,
    Luxury-Auto Makers in China Target Buyers With Smaller Cars
    http://www.wsj.com/articles/china-smaller-luxury-cars-the-new-trend-among-foreign-auto-makers-1428492191

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  7. Why? I can understand the growth in the SUV market as being something worth noting for most auto manufacturers but why Lamborghini? The don’t even make a four door version of the current sports cars. I can see serious risks to the Lamborghini brand – is the SUV a rebadged Audi or VW from the parent company or a fully Lamborghini engineered SUV. If the later do they have the resources, knowledge and experience to pull this off. An average SUV outcome would seriously undermine the brand. And finally would customers interested in the Lamborghini brand really be attracted to a SUV. For my money I would rather buy a second hand Countach.

    Like

  8. Very interesting blog and comments. It would seem the trend in comments is for Lamborghini not to diversify their range and enter the SUV market. On the other hand, the SUV market seems to have been growing and growing – it would be very tempting to join their sister brands by also entering the market. Maybe they have seen a loss in their current market share as a result of the move toward SUVs and given Lamborghini don’t make one their faithful are heading off to Porsche? I expect Lamborghini have done their research. I have to admit though – it is a big jump going from renowned sports car brand to SUV for either Lamborghini or Ferrari – if they also headed that way – would take some careful product design and targeted marketing to maintain that mystique and head turning ability they currently enjoy.

    Like

  9. When I think expensive sports car, I also think “mid life crisis”. So this blog got me thinking that Lamborghini is responding to the changing market and I was compelled to google SUV mid-life crisis vehicle. Sure enough I came across some articles that the mid life crisis car is as likely to be a SUV as much as a sports car. It really isn’t any wonder they need SUV market share as the SUV market is moving in on their traditional “mid life crisis” market.
    http://behindthewheel.com.au/news/suvs-attract-women-mid-life-crisis/
    http://www.ipsos-na.com/news-polls/pressrelease.aspx?id=6745

    Like

  10. Diversification is the key to survival. Those who were very successful at one stage and failed to diversify have lost heavily, fuji and kodak being such examples. Having said that I don’t imply that Lamborghini has any such risk in foreseen future but don’t forget those who buy Lamborghini at one stage of their life do move on to a next stage where they need an SUV. If you can keep a faithful Lamborghini buyer with yourself with the whole range than why not. All you need to do is if not be the best, at least be one among the best!

    Like

  11. Thank you for your blog.
    I am a big fan of cars. Especially when it comes to Sports and Super Cars.
    It is a great step for Lamborghini to launch a Suv Car. It is really innovative thinking of them. To create a Super luxury 4 wheel drive. As discussed in our seminar New products and new thinking with good innovative thinking will always lead towards success. And the company is famous for its High quality products and High price, so it will definately attract big tycoons in the world.

    Like

  12. Is an interesting blog for Lamborghini. When I heard the name of Lamborghini, the first thought on my mind is super cars. However, it is very interesting to see Lamborghini launching SUV cars to the market. It is a brave and great step for Lamborghini to go on and launch a new care on SUV market. It might surprise a lot of Lamborghini fans and getting more attention on the news. It is a different kind of field they are competing with the other car brand, the efficiency of the car and the marketing to be getting more trust that Lamborghini SUV from the customer is still with a risk. By getting in to the market, Lamborghini definitely needs to be more unique on their SUV product or else people would just buy other more dependence car rather than buying expensive price SUV.

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  13. Great idea! Innovative ideas and variations of products add to the success of big companies, however being such a luxurious brand the company can not afford to lose its very targeted market. The risk of doing so may arise from creating such bold variations of their products.

    Like

  14. Pingback: Great 2017 Lamborghini Urus Best Gallery 33 Pictures Cars Gallery | carsautogear.xyz

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