Porsche (before they were purchased by VW) used to make rather expensive cars and they would always have a rather small percentage of the overall market. But no-one would accuse Porsche of being a failure, because they did very well in their rather lucrative price brackets. In fact Porsche is often called the most successful car company ever due to their big profit margins.

Porsche still does make "rather expensive cars". What are you referring to exactly?

Car companies love this, after all how many times do you see something like "The best [insert feature here] in its class" in their marketing? Because there are so many different definitions of car classes, no-one can prove their statement wrong!

The "luxury" class of cars is pretty narrowly defined and includes the A8 and the BMW 7 series. (No, it doesn't include the 3 or the 5, or the A6.)

Edit: According to wikipedia (https://en.wikipedia.org/wiki/Car_classification#USA.2C_UK_a...) - the British English "Luxury Car" is represented by: Audi A8, BMW 7 Series, Jaguar XJ, Maserati Quattroporte, Mercedes S-Class.

Hardly any Americans would place a BMW 550i in the "non-luxury" group, least of all BMW USA. It isn't the largest or most feature-jammed car in the fleet, but to Americans it is absolutely a luxury car.

I disagree with both of you. Your categories are all are artificial and for people with "new money". It's a concern for those who seek to differentiate themselves from the rest the middle class by burning cash on these silly toys. Those with true wealth find this mundane and even distasteful.

"PEV[1] sales, while not matching up with original sales targets laid out by some auto manufacturers, have been strong for a new entrant in a market that has been dominated by internal combustion engine vehicles (ICEs) for a century. Through their first 30 months in the marketplace (2011-2013), sales of PEVs have been more than double the sales of hybrid electric vehicles (HEVs) in their first years in the U.S. market (2000-2002) and the sales continue to grow—June 2013 saw the strongest PEV sales numbers yet, and more than 110,000 units have been sold to date. In the luxury segment, Tesla’s Model S has captured 8.4 percent of the market in the first six months of 2013."

So, the 8.4% is actually not "luxury" class cars at all. It is a subset.

1) plug-in electric vehicles

The overlap between the two communities is probably larger than you want to believe.

Only the 7-series is unambiguously luxury. Which aligns with my European view that a 3-series is your bog standard "large family car" or "small executive car".

Is the non-M 3-series considered sports?

BMW 5 series are the most-purchased company cars here in Austria, they certainly aren't luxury cars anywhere outside the 3rd world, although they might enjoy a certain brand image in the US ...

BMW is an expensive brand, but the 5 series is mid-range.

It's certainly possible they're equipped differently here, as so many cars are. If that's not the case and Austrians simply have a different sense of "luxury car" I wonder what you guys have that trumps the 5 series in that size category, as far as "luxury" is concerned.

A thought-experiment: say you wreck your car, and your insurance provider is going to give you a loaner.

They want this loaner car to impress you (the cost of one regular car, however nice, is not much skin off their back, especially if they get to amortize it over all the people they lend it out to; and they want to give you the impression that they've got enough money to cover any problem you might have, so that you'll keep paying your premiums--the same reason bank lobbies look so "stately.")

However, they don't want to spend too much, because there's a point where cars switch from regular goods, to being Veblen goods. (http://en.wikipedia.org/wiki/Veblen_good)

The optimum between impressing you the most, and avoiding spending way more than the car "should" be worth for an any marginal gain of impressiveness, should define the type of car they loan out (and it does, in my experience.) You can draw the "luxury" inflection point as being exactly the next-most-expensive models up from these, where the value proposition stops making sense to economically-rational actors.

I would hesitate calling those luxury vehicles, if only based on their ubiquitous use by working professionals.

I live in Manhattan (so maybe Tesla is not big here), but in the last year I've only seen 2 Teslas on the road. By comparison, I see about 5-10 Audi A8's a day.