| The tough automotive climate has been a real drain on | | | | Many luxury cars are not efficient - When you think of |
| the economy. Along with a plunging housing market | | | | luxury, do the words "small" and "nimble" come to |
| and consumer concern over high gas prices, the cost | | | | mind? No. Instead, most vehicles are powered by V8 |
| of material goods, and food, the toll has been evident | | | | and V6 engines, just the type of car that gets 15 mpg |
| throughout 2008: we're weathering a stiff economic | | | | around town. Very few luxury cars are powered by |
| downturn. | | | | fuel efficient four cylinder engines; luxury vehicle drivers |
| Luxury Brands Take A Beating | | | | are also feeling pain at the pump. Newer cars with |
| One segment of the automotive industry getting | | | | smaller engines are on the way, but will consumers |
| whacked has surprised some analysts. Luxury | | | | turn to little engines to power their upscale rides? |
| vehicles, those cars made by Cadillac, Lexus, | | | | Competition is fierce - At one time, Cadillac and Lincoln |
| Mercedes, Lincoln, Infiniti, BMW, Jaguar, Acura and | | | | owned the luxury car market with BMW and |
| other high end brands are also seeing a sales retreat, | | | | Mercedes making inroads over the past twenty-five |
| perhaps signaling that the rich pull back in tough | | | | years. More recently, Japanese luxury brands including |
| economic times too. | | | | Acura, Infiniti, and Lexus have sprung up, expanding the |
| But, a closer look at the picture reveals some other | | | | market. As overall demand drops, the major players |
| things which may be dragging down sales. Let's take a | | | | are competing with each other, but aren't necessarily |
| look at some key factors driving current luxury car | | | | slashing prices either. |
| selling trends through the first eight months of this year: | | | | A Rebound Is Coming |
| Not every buyer is rich - Though a car may be a | | | | It won't take much of a bump in the economy to send |
| luxury brand, that doesn't mean that only the rich drive | | | | luxury cars soaring once again. Indeed, there are signs |
| these models. For example, the Cadillac CTS is a | | | | that the market is stabilizing as BMW's sales for the |
| midsize luxury car with a beginning sticker price in the | | | | year are actually up, albeit by only 0.9%. |
| low 30k range. Lots of buyers are middle class | | | | When luxury car sales start to increase, look for the |
| Americans, people who appreciate fine cars, but who | | | | rebound to spread throughout the market. Of course, |
| don't necessarily make more than $100,000 per year. | | | | retreating gas prices will play a significant factor in a |
| Some of these buyers are waiting for year end | | | | positive change, therefore if gas drops below $3 per |
| specials or pushing off their purchases until the | | | | gallon, then sales are certain to follow. |
| economy improves. | | | | |