You can’t stop the rich from having their toys, no matter what the state of the economy.
Not long ago, says one upscale dealer, you bought a new $60,000 car that looked pretty much like the old one, so you wouldn’t be outclassing the neighbors and looking piggy in the midst of a bad recession.
Now, as elsewhere, luxury vehicle sales are on the rise and are being fueled by a big boom in demand in China and other emerging markets. In the U.S., BMW is leading the way, up 18 percent over last year, and Audi is in a firm second place, with Mercedes-Benz trailing.
These are the cars the wealthy are buying—not Lexuses, since the company’s plagued with inventory problems, and certainly not Lincolns (good recent history of failure here)—with a few Cadillacs in the mix. Some oddities, like Range Rovers and Volvos, make up the balance. I’m not sure I believe the numbers in the chart here, but it breaks sales down by model.
We’re not talking about exotics, like the Aston Martin Zagato V12 for well over a half-million buckos. Just your garden-variety lux-mobile, most of them German. Altogether, if my math is correct, the German Big Three sold 254,447 cars in the U.S. in the first six months of 2011.
That’s a lot of high-priced iron, but the buying wave doesn’t seem likely to continue—for several reasons.
Profit levels at the premium automakers are at all-time highs, and investors fear they simply aren’t sustainable. The demand from China is likely to ease. And, most important, economic conditions in the U.S.—however the current budget-debt-spending debacle works out—are not looking promising at all.
If the U.S. goes anywhere near default, it will prick the luxo buying bubble quick. Do you agree?