Luxury Coach & Transportation

April 2019

Magazine for the professional limousine, charter and tour industry.

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48 WWW.LCTMAG.COM LUXURY COACH & TRANSPORTATION APRIL 2019 MARTIN ROMJUE Future Vehicles Could Redefine Luxury Fleet Service APRIL 2019 EDITOR'S EDGE T he 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 Associa- tion meeting on March 6 provided an overview of vehicles retiring and those emerging. e luxury ground transporta- tion is heading to an SUV and CUV future, with domestic manufacturers mostly ceding the industry sedan market to foreign brands. As of this writing, the Cadillac XT5 crossover is set to de- but at the 2019 International LCT Show on March 25-27 after a sneak peek at a GCLA event in December. Big Questions ere will be many ways to look at the vehicle choices in com- ing 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 van- ished from the market. e 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 emis- sions will change that deep desire. is 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 e upcoming fleet line-up offers new potential for opera- tors 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 transporta- tion 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 pre- dominantly CUV and SUV-oriented fleet can bolster price in- tegrity, 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 Mer- cedes-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 e 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 cru- cial, the outcomes may go either way as operators ex- ert 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 serve as a targeted and effective industry public relations cam- paign destined to get concrete results. martin@lctmag.com From the stretch limousine to the corporate sedan to the SUV/CUV: Luxury service redefined across the decades.

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