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Luxury buyers holding-off on new car purchases

Luxury buyers holding-off on new car purchases

Viknesh Vijayenthiran April 8th, 2008 Viknesh Vijayenthiran By Viknesh Vijayenthiran Author April 8th, 2008
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December 31st, 1969 America’s worsening economy and rising fuel prices has seen new car sales drop to their worst levels in 15 years and the situation is getting so bad that even luxury buyers, usually the last bastion of hope for car dealers, have put the brakes on their spending. Luxury vehicle sales are off almost 13% this year and analysts are predicting things to slow even further before the turnaround. Earlier this week reports emerged revealing American automaker sales were down almost 20% on levels just one year ago, but latest data from Autodata shows that luxury brands like Mercedes-Benz and BMW and also losing sales. Mercedes-Benz softened 3.7% compared with March last year, the source claims, while BMW fell 8.7% and Lexus plummeted 13.6%. According to a study by Unity Marketing, 40% of buyers with an average income of $155,700 plan to spend less on luxury goods this year, and when it comes to cars many plan to hold-off switching to a new model rather trade down. "They just want to see that the worst is over, the bottom is there and everything is going to be OK," CEO of car dealer AutoNation, Mike Jackson, told USA Today. "People are a little cautious right now."
Luxury buyers holding-off on new car purchases

Luxury buyers holding-off on new car purchases

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America’s worsening economy and rising fuel prices has seen new car sales drop to their worst levels in 15 years and the situation is getting so bad that even luxury buyers, usually the last bastion of hope for car dealers, have put the brakes on their spending. Luxury vehicle sales are off almost 13% this year and analysts are predicting things to slow even further before the turnaround.

Earlier this week reports emerged revealing American automaker sales were down almost 20% on levels just one year ago, but latest data from Autodata shows that luxury brands like Mercedes-Benz and BMW and also losing sales. Mercedes-Benz softened 3.7% compared with March last year, the source claims, while BMW fell 8.7% and Lexus plummeted 13.6%.

According to a study by Unity Marketing, 40% of buyers with an average income of $155,700 plan to spend less on luxury goods this year, and when it comes to cars many plan to hold-off switching to a new model rather trade down.

"They just want to see that the worst is over, the bottom is there and everything is going to be OK," CEO of car dealer AutoNation, Mike Jackson, told USA Today. "People are a little cautious right now."

Tags: Industry

Posted in: News


Comments (6 total)

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  1. By Wizards Lore #1, Posted: 4/9/2008

    welcome to the real world where things arent cheap/inexpensive anymore.

  2. By CraigS #2, Posted: 4/9/2008

    It all depends on how wealthy one is. Exotic car sales are at an all time high (Bently, Lamba, Ferrari etc.) so there are plenty out there where money is not an issue.

  3. By chris #3, Posted: 4/9/2008

    craig, like the article says.. "luxury" brands..... bmw and merc. they sell luxury en masse, and a lot of their sales are in the USA. this economic crisis will definitely hit the people who normally spend 70 grand on a car.

  4. By germandude #4, Posted: 4/9/2008

    I think this article is about American sales, the record sales companies Ferarri and Bentley are experiencing are probably because of the growing markets like China and of course Dubai.

  5. By Jim #5, Posted: 4/9/2008

    When home equity can no longer be tapped to fund your life style and those adjustables are resetting, you need to cut back somewhere.

  6. By Wizards Lore #6, Posted: 4/10/2008

    jim - yea llike food and water and shelter. Some people would rather look good driving a flash car than have a nice house..

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