Demand Elasticity of Luxury Automobiles

1445 words 6 pages
Demand Elasticity of Luxury Automobiles
In the luxury automobile market, there are many vehicles that boast high quality workmanship, luxurious appointments and powerful drivetrains. For this research paper, the midsize luxury sedan segment was chosen because most of the vehicles from the brands in this segment have similar features, power, and most importantly, price tags. The flagship models of the brands were not chosen since the features and amenities are very different from car to car to such a degree that it would be almost impossible to compare the models. The retail prices of the flagship vehicles also vary by a few thousand dollars, making a fair comparison between the models even more difficult. The midsize luxury sedan segment
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A navigation system is available with each vehicle, but is standard on the GS430. To even out the playing field, the navigation option was added to the Cadillac and BMW. This change in options actually brought the prices of the vehicles very close together.
The Lexus had the most front leg room; however the Cadillac had the most interior volume. All three models have about the same power output with the BMW being the most powerful with a 325HP engine. The Cadillac was a close second with a 320HP engine and the GS430 came last with a 300HP engine. They all achieve approximately the same miles per gallon in the city, but highway mileage varies between the three models with the BMW being the most efficient out of the group. The BMW gets 18 miles to the gallon in the city and 26 on the highway, the Lexus 18/23, and the Cadillac 16/22 miles to the gallon, respectively.
The Lexus felt the most nimble because as was suspected, it had a lower curb weight than the other models. The transmissions on all models were super smooth and power delivery was consistent with throttle input. The Lexus had the smoothest ride out of all three, however it achieved this because of how disconnected it felt from the road. The lack of communication from the suspension to the driver in the Lexus leaves the driver uncertain of road conditions and forces the driver to rely on vehicle safety systems to keep the car stable. The BMW had a sport suspension which made the


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