Luxury car

A luxury car is a passenger automobile designed for superior comfort and high-quality equipment.

These vehicles use more expensive materials and fine surface finishes than standard cars. Buyers expect a very high level of build quality from these brands. The term "luxury" is somewhat subjective and relative. It depends on both the actual qualities of the car and the image of the brand. Luxury cars come in many shapes, including sports cars, large saloons, and sport utility vehicles. Some even exist as compact models to fill specific niches.

To provide this comfort, manufacturers focus on specific mechanical layouts and systems. Many luxury cars traditionally use a front-engine, rear-wheel drive (FR) layout. This configuration is more expensive to produce than other types. However, it allows the car to house much larger engines. These include straight-six, V8, and V12 engines.

The suspension system is also a key part of the experience. Most luxury cars tune their suspension to prioritize ride quality over handling. This means the car focuses on a smooth, soft feel. Some models are marketed as "sports luxury" to balance smooth rides with better handling.

Different regions use various classification systems to define luxury. In Europe, the European Commission classifies luxury cars as F-segment vehicles.

Italy uses the term "auto di lusso," while France uses "voiture de luxe." In Germany, they are called "upper class" vehicles. Russia uses the term "representative class vehicle." Australia uses a tax system to identify them. Since 2000, a luxury car tax applies to new vehicles over a certain price. In 2019, the threshold was approximately AU$66,000 for standard cars. For fuel-efficient vehicles, the threshold was higher at AU$76,000.

History shows that luxury car manufacturing has changed significantly over time. In North America, the phenomenon began when wealthy people bought cars for social prestige. The 1920s and 1930s were the peak for very large luxury automobiles.

However, the Great Depression put many of these manufacturers out of business. In Europe, many producers like Rolls-Royce and Bugatti made luxury cars before World War II. After the war, Germany emerged as a powerhouse with brands like Mercedes-Benz. BMW also evolved into the luxury market and acquired Rolls-Royce Motor Cars in 1998.

American luxury brands saw massive success in the mid-to-late 20th century. From 1946 until the late 1990s, Cadillac was the top-selling luxury brand in the U.S.

Lincoln held the second position during this era. Successful models included the Cadillac DeVille and the Lincoln Continental. In 1990, American luxury brands were very dominant. Cadillac sold over 250,000 cars that year. Lincoln had its best year ever in 1990 with 231,660 units. Later, the market shifted toward smaller, efficient imported brands from Japan and Germany.

Many manufacturers create specific sub-brands to target the luxury market. This allows them to separate high-end models from their standard lines. For example, Toyota launched Lexus in 1989. Nissan launched Infiniti in 1989, and Honda launched Acura in 1986. Hyundai later introduced Genesis in 2015.

In East Asia, manufacturers like Hongqi have produced luxury cars since 1958. Today, new brands are using electric powertrains to enter the market. This includes companies like Nio, Zeekr, and Yangwang.

Economic shifts often impact how luxury cars are designed and sold. The 1973 Arab Oil Embargo and the 1979 oil crisis changed American luxury cars. Many manufacturers switched from rear-wheel drive to more economical front-wheel drive layouts.

By the early 2000s, many American brands reverted to rear-wheel drive. The 2008 financial crisis also caused a major decline in sales. This was the first time the market suffered this much since the Great Depression. Many customers saw their net worth decline, leading to lower demand for high-end models. However, interest in luxury vehicles remained high in emerging markets like China and Russia.