Luxury sales keep pace in U.S.

Sliding together
How sales of U.S. luxury* vehicles compare with the U.S. light-vehicle market. Percentages reflect change compared with a year ago.
Luxury 570,567 -6.00%
Light vehicles 12.8 million -5.7
Luxury 58,640 -12.30%
Light vehicles 1.3 million -12.5
*Defined as vehicles with a base price above $38,000

In an ailing U.S. auto market, sales of luxury vehicles are holding their own. But the sales from make to make swing widely, and the most expensive luxury trucks are showing signs of strain.

For September and the year, sales of luxury vehicles have closely matched the declines of the U.S. market. Both were down in the 12 percent range in September, a month in which dealer traffic vanished after the terrorist attacks, with sales returning with the help of 0 percent financing.

For the year, the total market and luxury sales are both off about 6 percent.

Luxury vehicles counted in this story are those with a base sticker price above $38,000 - the U.S. government's threshold for the luxury tax.

This year's sales counter the notion that spending on luxury goods is the first to go when times get tough. In fact, auto dealers say this year's results support a long-held belief about the well-to-do.

"Luxury-car buyers weather hard times better," said Brett Denver, owner of Precision Cars in Atlantic City, N.J.

But what isn't so easily explained is the dramatic swings from make to make. Sales of Mercedes' luxury vehicles were down 20 percent in September, while BMW was up 21.5 percent.

Porsche sales fell 16.4 percent, while September sales of Audis nearly quadrupled.

Denver said such trends were reflected in his showroom, where Porsches stopped moving after the attacks.

"A two-seater car isn't a necessity," he says. "A Porsche is a toy for a lot of people, and while no one is canceling orders, Boxster and 911 sales are down."

BMW sales are hot

BMW sales, meanwhile, keep roaring ahead, especially cars.

"We're going on cruise control. We've been selling at record pace all year, and it didn't stop on Sept. 11 or when the recession talks began," said Gary Catania, general manager of Rallye Motors, which sells BMW, Mercedes, Acura, Rolls-Royce and Lexus brands in the New York suburb of Roslyn.

Catania said he has been surprised to see slowdowns at Lexus and Mercedes-Benz dealerships. "I thought the BMW buyer was the same kind of buyer and came out of the same mold as the Lexus and Mercedes-Benz customer. But our Lexus and Mercedes-Benz stores have been hurting."

Bill Brewbaker, owner of Brewbaker Motors in Montgomery, Ala., said BMW is his best-selling brand.

"The people who have the money to buy those kinds of cars are not as concerned as those who depend on being able to make their monthly car payments," said Brewbaker, whose dealership also sells Infiniti, Dodge, Saturn and Buick.

Luxury trucks lack appeal

Meanwhile, if there is a place where the luxury brands aren't keeping pace, it's trucks. In the United States, there are eight truck nameplates above the $38,000 threshold.

All but the BMW X series and the Cadillac Escalade were down in September and for the year.

Sales of the Lincoln Navigator, Lexus LX 470 and Toyota Land Cruiser each dropped more than 40 percent last month. And overall sales of luxury trucks fell 14.3 percent from their year-ago mark, compared with a 10.9 percent decline for light trucks.

Even 0 percent financing on the Lincoln Navigator hasn't helped sales because the vehicle is simply priced too high, said Tom Galante, general manager of West-Herr Ford-Lincoln-Mercury in Hamburg, N.Y. "The Navigator isn't exactly a stellar performer," Galante said.

Sales of the Cadillac Escalade on the other hand, jumped 22.9 percent in September.

Those sales were fueled largely by the 0 percent deals that have failed at Lincoln, say dealers.

Bob Allen, owner of Bob Allen Motor Mall in Danville, Ky., said the financing is drawing buyers who normally aren't in the market.

Escalades are selling, but Allen says at his dealership, the Cadillac DeVille is moving better.

"Cadillac buyers are taking advantage of 0 percent deals and buying instead of leasing.

"Our volume has improved 20 percent since the financing has been offered," said Allen, who also sells Chrysler, Jeep, Dodge, GMC, Nissan and Pontiac.

You can reach Diana T. Kurylko at

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