Small luxury crossovers are bright spots in North America for European brands whose U.S. sales overall have suffered in the recession.
The Audi Q5, Mercedes-Benz GLK and Volvo XC60 are luring customers out of larger SUVs and sedans as well the Lexus RX 350 -- although the slightly larger Lexus remains the king of the segment.
The Europeans say they could take a bigger bite out of Lexus if they could get more units. That's difficult because demand is just as heavy overseas.
For example, Volvo Cars of North America wants more units of the XC60 with all-wheel drive, says Tassos Panas, Volvo Cars' executive vice president of sales operations.
"The vehicle is doing extremely well. Dealers are trying to secure more inventory," Panas says. "There are no cars lying around in port, and we are asking to get as many as we can from Sweden."
Volvo has sold 2,495 units of the XC60 in the United States. U.S. buyers are flocking to the smaller crossovers because they are roomier than sedans and ride like passenger cars but have decent fuel efficiency of about 20 mpg in combined city and highway driving.
The vehicles, priced in the upper $30,000s for awd models, are more affordable and socially acceptable than the brands' large SUVs, executives say. The large SUVs range from the mid- to high $40,000s and have fuel economy in the teens.
Ivan Drury, an Edmunds.com analyst, says fresh product helps.
"The Audi Q5, Volvo XC60 and Mercedes-Benz GLK are all brand-new vehicles on the market for this year; therefore, they have the edge over anything currently out there, even if it has had a redesign," Drury says. "These vehicles can be considered part of their own segment."
The smaller, sportier European crossovers "carry the prestige of the luxury make but can be had for less than the typical luxury SUV," he says.
Leading in U.S. sales is the Mercedes-Benz GLK, the smallest and most controversial-looking of the vehicles. Since the vehicle's debut in January, Mercedes has sold 9,444 GLKs. Mercedes has 1.9 to 2.9 percent APR financing on the crossover.
Through May, the GLK has outsold the larger Mercedes M- and GL-class SUVs.
David Larsen, product manager for SUVs at Mercedes-Benz USA, says there are shortages -- especially of the two-wheel-drive GLK, which went on sale April 9. It has a base price of $34,775, including shipping.