European automakers such as BMW, Audi, and Volvo are striving to boost sales in the US market to offset weakness in Europe and China.

BMW, Audi, and other European car companies are planning to develop larger sport utility vehicles (SUVs) specifically for the US market.

BMW, Audi, and other European automakers are seeking to revive their US sales performance with a new generation of extra-large luxury SUVs.

BMW told investors in Munich this week that it plans to build an extra-large SUV specifically for the US market. Volvo Cars said it will launch a larger SUV in the US as part of a major overhaul of its product lineup. Audi recently held a launch event on a hotel rooftop in New York to unveil its first full-size SUV, the Q9.

Volvo Cars CEO Hakan Samuelsson said in an interview: "Americans just love large SUVs. So why not go with the flow?"

Hit by falling home prices and the rise of domestic digital carmaking competitors, European automakers have struggled in the Chinese market and urgently need to find new sources of growth. In the past, the Chinese market once contributed as much as half of profits for BMW, Mercedes-Benz, and Volkswagen, the parent company of Audi.

After the Trump administration relaxed vehicle emissions standards, the business case for launching large SUVs in the US became even stronger. Under the new rules, automakers no longer need to sell large numbers of fuel-efficient models to offset the emissions pressure from large, high-displacement, fuel-hungry SUVs. With profits from the Chinese market shrinking, the importance of the US market has been elevated to an unprecedented level.

Large SUVs are a highly attractive segment, offering higher profit margins. Tyson Jominy, senior vice president at market research firm J.D. Power, said: "It's a general rule in the auto industry that the bigger the vehicle, the higher the profit."

Currently, the large SUV segment (including luxury models) is dominated by Detroit-based automakers. The Cadillac Escalade is by far the best-selling full-size luxury SUV in the US; since Trump took office and promised to cut electric vehicle subsidies and relax emissions regulation, shares of its manufacturer General Motors have remained at historic post-bankruptcy highs. European automakers' shares, by contrast, are at multi-year lows, and now they also want a slice of this market.

The all-new Audi Q9 is about 209 inches long, approaching the size of the Cadillac Escalade (about 212 inches). The standard Q9 is priced at $87,700 and is powered by a 3-liter V6 engine; the high-performance SQ9 version for the North American market is priced at $118,000 and features a 4-liter V8 engine. Jominy said: "American consumers in this segment want as much power as possible."

Audi does not have its own factory in the US, and the Q9 will be produced in Slovakia. The Trump administration imposes a 15% tariff on vehicles imported from the EU, and deliveries of the vehicle will begin in November.

Few details have been disclosed about the new SUVs from Volvo and BMW, but both companies have factories in South Carolina that are well suited to producing their largest SUVs. BMW's Spartanburg plant is currently running at full capacity. People familiar with the planning said BMW may shift some production of the smaller X5 SUV back to Europe to free up capacity for the new model. Greater regional self-sufficiency in production can also reduce tariff costs.

Comparison of popular SUV sizes (all 2027 models): Cadillac Escalade: 211.9 inches; Audi Q9: 209.0 inches; BMW X7 xDrive40i: 203.6 inches. Note: European SUVs are growing in size to compete with American SUVs; data comes from the automakers.

Unlike BMW's plant, Volvo's factory near Charleston still has substantial idle capacity, and the Swedish automaker is eager to put that capacity to full use. Samuelsson said: "We previously bet on producing electric vehicles, but the result was insufficient capacity utilization at the plant. We need to build other models at this factory."

Although European luxury brands are targeting the same market as the Cadillac Escalade and Lincoln Navigator, the product characteristics of the new models will differ. The Cadillac Escalade and Lincoln Navigator use traditional body-on-frame construction, consistent with pickup truck structure, with the cabin bolted onto a separate chassis. European automakers, by contrast, excel at unibody construction, in which the body and chassis are integrated. Unibody construction has advantages in fuel economy and on-road handling; body-on-frame construction is better suited to off-roading and towing heavy loads.

People familiar with the planning said Volkswagen is an exception and will likely develop body-on-frame models for the US market, including pickups and large SUVs. Volkswagen is internally discussing two approaches: one is to partner with automakers that already have body-on-frame technology to get new vehicles to showrooms faster; the other is to develop the architecture independently with North American suppliers.

Large SUVs, which are very rare in Europe, have become a research and development priority, reflecting a broader strategic shift by European automakers toward regionalized product strategies. In the past, luxury carmakers generally sold the same global models everywhere. But now higher tariffs, local content regulations, diverging emissions rules across regions, and differences in consumer preferences are forcing automakers to launch more customized models for core markets. Simon Schnurrer, global head of automotive at Oliver Wyman, said: "The definitions of luxury cars among American consumers and Chinese consumers are diverging more and more."