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.
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.
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….