Luxury Sales Surge: Are The Fat Cats Not Feeling The Recession?

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2010 Mercedes-Benz E-Class Coupe

2010 Mercedes-Benz E-Class Coupe

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Are luxury-car shoppers feeling the recession in the same way everyone else is? Take a look at the boarded-up store fronts on Main St., then check out the country club parking lot, political contribution coffers, and luxury dealerships and you might feel differently.

There's a distinct division as well between the Miracle Mile auto malls and boutique showrooms: sales of luxury vehicles, and in some cases larger discretionary vehicles, are going strong while mass-market sales continue to take a dive.

Over the past month, Audi was up 14 percent, Mercedes-Benz up 15 percent, Porsche was up 33 percent, and Jaguar sales were up 62 percent—all versus August 2009.

Meanwhile, mainstream brands are all down. In some cases, way down. Nissan, Mazda, Toyota, and Honda were all down more than 25 percent, while Mitsubishi was down 37 percent and Suzuki sales were 68 percent lower than August of last year.

Don't forget about the Clunkers

Before going any further with this, there's one very simple explanation: Cash for Clunkers. Last August, the U.S. auto market was in a frenzy, looking to buy some of the most economical vehicles that might qualify for a federal rebate of up to $4,500. It cleared lots of smaller, affordably priced cars while not generating much traffic at luxury dealerships.

And before thinking that the fat cats are spending big, it's worth considering that these numbers are all compared to last August, when luxury sales all but ground to a halt. "It stopped, effectively, all traffic at dealerships," recalled Jesse Toprak, VP for industry trends at the pricing intelligence firm TrueCar, leaving most at rock bottom for sales volume. "Some Mercedes-Benz and BMW dealerships had parties when it [Cash for Clunkers] was all over."

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