Luxury car sales are on track to have best month in years
More consumers are buying high-end vehicles despite economic uncertainty.
What fiscal cliff ? Luxury cars are f lying out of U.S. showrooms this month, helped by a blitz of advertising and optimism among consumers eager to treat themselves to a fancy set of wheels.
Car buyers appear “unfazed by the current level of economic uncertainty gen- erated by the fiscal cliff negotiations,” said John Humphrey, senior vice president of global automotive operations at J.D. Power. Sales of expensive cars are on track to have their best month in many years, he said.
High-end cars will account for 16% of retail vehicles sold in December, an increase from 15.3% in November 2012 and 14.8% in December 2011, according to J.D. Power. (Those figures don’t include f leet sales to rental car companies, commercial customers and government agencies.)
Sales of luxury cars have traditionally been strong in the last few months of the year, when top earners such as lawyers and investment bankers spend their yearend bonuses, said Jessica Caldwell, an analyst with auto information company Edmunds.com.
Brisk sales this year also come from a rebound in the luxury auto market as wellheeled buyers who were nervous about the economy pull the trigger on car purchases delayed for several years.
Adding to the frenzy is the heavy advertising and attractive year-end specials
offered by BMW and Mercedes-Benz as they duke it out for bragging rights as the nation’s top luxury brand.
The competitors are separated by a razor-thin margin. Through the first 11 months of this year, Mercedes-Benz leads with 245,910 vehicles sold. (The total subtracts Mercedes’ utility van business.) BMW is second at 244,061 vehicles. Lexus, once the perennial U.S. luxury car leader, is well behind in third with sales of 213,559.
Mercedes said it’s more concerned with setting a 2012 U.S. sales record than beating BMW by a whisker.
“We led at the end of the November, but BMW will pull some high numbers out of the hat and will pull ahead this month,” said Donna Boland, a Mercedes spokeswoman. “It doesn’t matter to customers, a record year is good enough for us.”
Mercedes dealers are reporting that they are under pressure from many customers to make sure the vehicles are prepped and ready for delivery to people’s driveways by Christmas Day. Its two bestsellers are the Cclass sedans, which sell for about $35,000, depending on equipment, and its bigger $50,000 E-class siblings.
Meanwhile, BMW isn’t ready to cede the crown it won last year. It’s going after younger buyers by offering $3,500 off its $35,000 328i sports sedan.
“Let’s see what happens,” said Dirk Arnold, a BMW spokesman. “The race is still on.”
Overall, the U.S. auto market is finishing 2012 at its highest level since 2007.
LMC Automotive is forecasting that 2012 light-vehicle sales will reach 14.5 million, a 13.5% gain over 2011. The research f irm thinks that the growth rate will slow but the industry will still reach 15 million autos in 2013.
“The U.S. light-vehicle sales market continues to be a bright spot in the tremulous global environment,” said Jeff Schuster, an analyst at LMC Automotive. “The only major roadblock ahead for the U.S. market is the fiscal cliff. Assuming that hurdle is cleared, 2013 is one step closer to a stable and sustainable growth rate for autos.”
Sales might even top 15 million, he said, a level not seen since 2007.