Premium market pressures

The high end of the market is facing increasing headwinds. Elevated interest rates, cost-of-living pressures and a post-pandemic recalibration of buyer priorities are reducing demand for luxury models, while the mid-market continues to see stable or rising values.

At the same time, new entrants – particularly fast-growing Chinese brands – are reshaping consumer expectations around price and specification. Their aggressive positioning in SUVs and EVs is adding extra competitive pressure on traditional premium marques, contributing to softer demand and declining resale values in these segments.

What this could mean for your business:

• Stocking decisions should account for divergent performance between mainstream and premium segments.
• There are opportunities in premium passenger vehicles for price-sensitive buyers.
• SUV demand remains a key driver of market stability.
• Shifts in residual values could affect insurers total loss settlements and replacement costs – staying aligned with the latest valuations is critical.
• More volatile values in premium segments may influence financiers risk assessments, loan-to-value ratios, and future portfolio performance.
• A softening premium market may open opportunities for cost-effective fleet renewal, particularly with new competitive entrants impacting value retention.

RedBook will continue to provide the data and insights you need to navigate these evolving conditions with confidence.