German carmakers are expanding an industry charge into so-called premium "crossover" vehicles, seeking to tap demand for models that combine the functionality and cachet of sport utility vehicles (SUVs) with the comfort and performance of luxury cars.
BMW AG and Daimler AG, the global luxury car leaders, each plan to expand its crossover portfolio to seven vehicles by 2020, according to European supplier sources, with new entries in multiple sizes and price points.
Volkswagen AG's (VW) upscale Audi subsidiary will be nipping at their heels, with a future lineup of six crossovers, those sources added.
Nearly one in every four premium vehicles sold last year in Europe was a crossover or sport utility model, and the category continues to grow, despite concerns about size and fuel consumption, according to UK-based consultancy LMC Automotive.
Why the boom? According to BMW development chief Herbert Diess, crossovers "have a strong appeal and convey a certain sense of lifestyle. People want to set themselves apart from the mainstream."
Peter Fuss, a senior partner and automotive specialist in Ernst & Young's German practice, added: "Consumers want more premium quality ... And crossovers have a more modern design."
The surge in new German models is part of a broader trend, as VW, BMW and Daimler reap the benefits of investing through a six-year European car market slump.
But this month's Frankfurt car show will signal they are not alone in trying to grab a slice of the premium crossover market.
Britain's Jaguar, now owned by India's Tata Group, studied then scrapped plans to develop a luxury utility vehicle more than a decade ago. Now, it is teasing a future crossover - its first ever - at Frankfurt with the C-X17 concept.
The wagon-like hatchback is said to be a precursor of Jaguar's Q-Type, which is being jointly developed with a new compact sedan that Jaguar expects to pitch at the BMW 3 Series.
The Q-Type crossover - it may also be called XQ - would be targeted in 2015 at the BMW X3 and Audi Q3 crossovers, suppliers said.
Japanese brands Lexus and Infiniti, owned respectively by Toyota Motor Corp and Nissan Motor Co, are trying to