High-income consumers are increasingly moving away from luxury vehicles and choosing mainstream car brands as advanced technology, comfort and premium features become more widely available at lower prices, according to a recent study by J.D. Power.
The shift reflects growing resistance among buyers to paying an additional $20,000 or more simply for a prestigious badge. Mainstream automakers have significantly improved the quality and technology of their vehicles, narrowing the gap with premium brands.
The trend poses a fresh challenge for luxury automakers such as Mercedes-Benz, BMW and Audi, which have already faced growing competition from Tesla and Chinese carmakers. As affordability becomes a more important factor in vehicle purchases, the appeal of traditional luxury badges appears to be weakening.
According to the J.D. Power research, premium vehicles now account for the smallest share of total vehicle sales since 2020. The study found that 32% of buyers who previously purchased luxury SUVs switched to mainstream brands.
Those buyers had previously spent an average of about $70,600 on luxury models. After switching brands, their average spending on a new vehicle fell to around $51,500.
The trend is particularly pronounced among households earning less than $100,000 a year. For these consumers, many of the features once associated primarily with luxury vehicles—including advanced technology, comfort and driver-assistance systems—are now available in mainstream models from brands such as Chevrolet, Toyota and Hyundai.
Luxury vehicles are also becoming harder to sell without larger incentives. J.D. Power data showed that mainstream automakers offered an average discount of about 6% off vehicle prices in August, while luxury brands had to provide discounts averaging roughly 7.3%.
The changing preferences suggest that luxury automakers may face increasing pressure to justify their higher prices by offering more distinctive technology, design and ownership experiences rather than relying primarily on brand prestige.
