Luxury Cars Americans Are Buying

BMW M5

BMW M5

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.

Audi A6 front

Audi A6

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?

jgoods

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5 Comments

  1. I’m not sure you are differentiating luxury from expensive. The M5 is a performance car, not a luxury car. I think some of the big benzes, regular BMW’s, Cadillacs and Audis fit the bill better. To me, luxury car means comfort, quiet, fine appointments like glove leather seats, and high performance is secondary.

  2. Wow, I didn’t know I had a fan, Panayoti. I’m no economist, but if the U.S. defaults, that will very likely drop the value of the dollar internationally and drive up interest rates. That would make imported luxury cars a lot more expensive here and probably move at least some of your “dudes that aren’t” into the bellyachin’ camp.

    If those new bellyachers can find domestic cars that satisfy their definition of luxury, that might be good for sales of high-end domestics, but I think jgoods is right that a default would hurt American sales of imported luxury cars.

  3. @ panayoti
    It’s not Hollerin, Sr. P., it’s jgoods, the one with cramps in the brain. Forgot to sign the piece. Obama is afraid to tax anything!

  4. C’mon Hollerin, sign in please. I enjoy seeing your name here occasionally even if you don’t. You’ve got to get out from behind the wheel and stretch your legs every once in a while, else you’re liable to get cramps in your legs or other parts. In answer to your question, hell no! Its you and me that are bellyachin over the price of this and that, not the dudes that aren’t. If Obama taxes sales of these like the yacht makers then maybe you might be right.

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