In past recessions, sales of luxury cars held on
DETROIT -- In yet another sign that the party is over, luxury-carmakers say sales to the ultra-wealthy consumers they rely on are evaporating.
It's not that those folks are worried about jobs or can't get a car loan. Most still are rich enough to plunk down cash for their high-status wheels. It's that the economic crisis has eroded their confidence and optimism. And that worries carmakers who rely on a small, rarified world of buyers for their lavish machines.
"No country in the world has been unaffected, and no matter where you put your money, you are losing," says Raffaele Fusilli, commercial director for Maserati. "In any case, we do not want to enter into a pessimistic club. … We are quite confident that the American economy" will lead the rest of the world in a recovery.
It's a change from past recessions in which luxury-car sales held steady or fell a little, and generally stayed healthy. But the drop in high-end sales was more than the fall in overall passenger car sales in the fourth quarter when the banking crisis really hit, according to IHS Global Insight. Luxury sales were off 34.2% vs. 31% for the broader passenger car market.
"People have stopped buying cars. It's not a unique phenomenon to the luxury market. It's a general trend," says Aaron Bragman, an analyst at IHS. "We're looking at a situation where just about everyone is tightening their belt. Trying to find buyers in the luxury market is just as difficult as finding a customer in any other market."
That has executives at Bentley Motors closely monitoring sales every month and hesitating to say where they think sales will go this year.
"The changes in the market don't follow any trend we can recognize," says Stuart McCullough, Bentley's board member for sales and marketing. "This is not like any other recession we've lived through. It's been more severe and more sudden. … There was a certain amount of shock in the last quarter and year."
The best way to combat a slow market is with new products, he says, because high-end consumers often are tempted to buy the newest thing on the road.
"New models will drive the recovery, that's a certain," McCullough says. "It will get people coming back into the showrooms. At the top end of the market, it's very much … people who want to have the latest and greatest and newest."
Luxury-carmakers have plenty on hand at the North American International Auto Show in Detroit, which opens to the public Saturday and goes to Jan. 25:
•Bentley Continental GTC Speed. Bentley unveiled a faster, convertible version of the Continental GT Speed. The $231,400 two-seater due in June goes 0 to 60 miles per hour in 4.5 seconds. It has a 600-horsepower W-12 engine that Bentley says is more efficient than the previous model because of lighter materials.
The company also is working on a car that can use biofuel for later this year.
•Maserati Quattroporte GT S. The sports car is meant for drivers, not those who want to be driven, Fusilli says. It has 433 horsepower, costs $133,500 and goes 0 to 60 mph in 5.1 seconds.
Fusilli says the Quattroporte, on sale now, is perfect for these economic times, because the design is sleek and conservative.
•Jaguar XFR. The new 5-liter, 510-horspower supercharged V-8 in the 2010 XFR sedan due this summer is not a run-of-the-mill engine update.
To prove that, Jaguar handed a preproduction XFR to racer Paul Gentilozzi, who on Nov. 7 — with no changes to the drivetrain, he and Jag insist — hit 225.675 miles an hour on a 6-mile straight on the Bonneville Salt Flats in Utah.
That lets Jag brag it has a production car faster than the 1992-94 XJ220, famous among auto buffs for its 220 mph top speed. Jaguar has not set a price.
•Fisker Karma. Just 12 months after first showing a concept plug-in sports car, CEO Henrik Fisker says the 201-horsepower car is ready for prime time.
The $87,900 car runs 50 miles on a single charge and goes into production this year.
Contributing: James R. Healey