Vehicles

Future Vehicles Could Redefine Luxury Fleet Service

Martin Romjue
Posted on April 8, 2019
From stretches, to sedans, to SUVs: A size evolution in motion for industry fleets (LCT image)

From stretches, to sedans, to SUVs: A size evolution in motion for industry fleets (LCT image)

The industry is about to see a major shake-up of vehicle offerings through 2021 as the domestic sedan market contracts while the SUV and crossover utility vehicle (CUV) market widens.

A presentation at the Greater California Livery Association meeting on March 6 provided an overview of vehicles retiring and those emerging. The luxury ground transportation is heading to an SUV and CUV future, with domestic manufacturers mostly ceding the industry sedan market to foreign brands.

The Cadillac XT5 crossover debuted at the 2019 International LCT Show on March 25-27 after a sneak peek at a GCLA event in December.

Big Questions

There will be many ways to look at the vehicle choices in coming months and how they will affect luxury fleet operations. One big issue looming is how operators should market and price their service.

• How should your price a CUV/SUV compared to a sedan?
• How do you price CUV/SUVs compared to high-end foreign sedans in luxury fleets?
• How will more spacious CUV/SUVs change the image and brand of luxury ground transportation overall?
• What are the consequences of fewer sedan choices?

Such questions could occupy plenty of panel discussions and social media forums. Answers will likely emerge as more specific models and prices are rolled out in the next two years.

Spacious Reasoning

What should be apparent is we haven’t seen a transition in fleet choices like this since 2011-2012 when the former Lincoln Town Car Executive L and the Cadillac DTS gave way to the Lincoln MKT, Cadillac XTS, Lincoln Continental, and the Cadillac CT6. All models reflected higher federal fuel mileage requirements, which meant automakers had to use smaller sedan platforms with shorter chassis. Wider, longer boat-like rear-wheel-drive sedans that embodied limo attributes vanished from the market.

The industry fleet vehicle trend reflects the overall drift in American consumer preferences. Despite all the hype about economical, smaller sedans, the traveling public wants the space, safety, and comfort provided by CUVs and SUVs. No amount of sermonizing on fuel mileage, fossil fuels, and carbon emissions will change that deep desire. This industry tried the Prius-Fusion-Camry route 10 years ago, and that road did not lead to luxury or any lasting customer loyalty to such models.

Pricing Power

The upcoming fleet line-up offers new potential for operators who define themselves by moving their operations up the luxury scale. Roomier vehicles with added head, hip, and legroom along with more cargo space meshes with the upscale service that sets luxury-based ground transportation apart from transportation network companies (TNCs) such as Uber.

TNCs have promptged many clients to notice the value of a safer, higher-quality, and more reliable ride service, which to them is worth paying for. Let the TNCs run the smaller to mid-size sedans as cabs while this industry defines itself with larger, higher vehicles that are the safest on the road.

As one operator told me, “Price is a function of value and service delivered, as opposed to personal finances.” A predominantly CUV and SUV-oriented fleet can bolster price integrity, and may justify rate increases in some markets. As long as the larger vehicles come with more attention to detail and service, clients will seek that complete user experience above all the other forms of ground transportation.

For clients who still prefer an upscale luxury sedan, any new domestic models as well as foreign labels such as Mercedes-Benz, BMW, and Volvo can meet the demand. Clients will be the final determiners of an operation’s fleet mix. It will be interesting tosee whether a future foreign luxury sedan or SUV will rank higher on the fleet scale of luxury prestige.

More Potential

The shake-up in fleet vehicles also underscores the leading front in succeeding in a sector disrupted by TNCs. While regulatory and legal battles are still crucial, the outcomes may go either way as operators exert influence. But operators can control their quality large vehicle purchases and high-touch service standards, which will trump the TNCs every time.

Such an approach would be one targeted and effective industry public relations campaign that gets concrete results.

Related Topics: Cadillac, Fleet Vehicles, Greater California Livery Association, industry trends, LCT editor, Lincoln, Martin Romjue, new vehicles

Martin Romjue Editor
Comments ( 1 )
  • Jay

     | about 3 months ago

    As a conference & events coordinator, and frequent user of ground transportation services, here's my take on the points mentioned. • How should your price a CUV/SUV compared to a sedan? If the CUV/SUV is priced comparably to a sedan, adjust the pricing minimally, as you're taking away a vehicle option, with nothing directly replacing it. • How do you price CUV/SUVs compared to high-end foreign sedans in luxury fleets? A high-end sedan will probably never be displaced as a brand's flagship (as nice as the GLS, X7, and Q7, are, they'll never have the same presence, or image, as an S, 7, or A8), as such, it should command a premium, but at the same time, the service level should also reflect the premium. • How will more spacious CUV/SUVs change the image and brand of luxury ground transportation overall? CUV/SUVs are the new station wagons, and minivans, of the automotive market. Their ever growing presence in the pick-up line at the local elementary school, grocery store, hardware store, and Walmart, makes it hard for them to be seen as a step above any other vehicle option. When choosing a provider, we now look for the best service, and that's what will allow companies to charge higher rates. • What are the consequences of fewer sedan choices? Other than a depressingly bleak selection of nice vehicles, this probably shouldn't affect anything.

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