Last post on Nov 25, 2013 at 11:27 AM
You are in the Sedans
What is this discussion about?
Lexus GS 430, Acura RL, BMW 5 Series, Volvo S80, Audi A6, Infiniti M35, Infiniti M45, Mercedes-Benz E-Class, Cadillac STS, Sedan
#3311 of 10348 Re: Segment busting out [merc1]
Aug 03, 2005 (6:23 am)
Not only have luxury vehicle sales been spiking in 2005, but there was also a jump from 2003 to 2004 for several brands. However, there were winners and losers last year...
Acura + 16%
Lexus + 12%
Cadillac + 10%
BMW + 7%
Infiniti + 7%
Volvo + 3%
Mercedes Benz -1%
Plus, Land Rover and Hummer were both down -20% each. Porsche was up +14%, and Ferrari up +8%. In 2005, Infiniti has further padded its success, and so have Cadillac and BMW. Mercedes holding their own, and scratching their way back a little.
Source: JD Power, Autodata
I think some of the reasons include...
1. Our population is aging, especially with the Baby Boomers. There is a widening between the have's and have not's in our economy, and sales in luxury segments are somewhat immune from economic downturns.
2. Analysts say the premium market is driven by 3 main factors--status, perceived quality, and value. To a great extent, luxury cars are a fashion statement.
3. The choices at the entry level luxury segment continue to improve, including choices of crossover luxury SUVs. See G, TSX, TL, ES, 3, C, A4, XC90, RX, MDX, X3....
4. 70 to 90% of these cars (depending on brand) are leased. This allows people to drive cars that they couldn't otherwise afford with their disposable income. Plus, once you start leasing, unless you are saving a lot of money, it tends to lock you into a leasing cycle. Thus, when it's time to re-lease, there is the temptation to pay $50 more per month and upgrade.
But there are clearly some losers in this segment...Jaguar offended loyalists with their weak attempts at the entry level, Lincoln has stale product, Hummer and Land Rover slipped with other trucks, and perception of reduced quality is a factor with some European brands. Audi is on a bit of thinning ice and the next couple years will be critical for them.
#3312 of 10348 Re: Segment busting out [merc1]
Aug 03, 2005 (6:31 am)
In looking at the sales for this segment for this year vs last year I have to wonder where all these buyers are coming from?
Uh this is America the land of indebtedness - most folks have no problem whatsoever living in debt up to their eyebrows. Most folks are way over-extended in housing, plastic, cars, etc. All the more easier with leases - all folks have to do is make a monthly payment.
The very fact of so many folks buying above their means makes the current status/prestige discussion very amusing
Aug 03, 2005 (6:33 am)
YTD for 2005, Acura has sold 10,173 RLs. They still have a shot at meeting their informal target of 20,000 units, although it will be very close. I assume the price point of the 2006 model will remain close to current levels, and the RL will add several new safety features for '06. Couple that with great deals on the outgoing '05, and they may indeed get there.
#3314 of 10348 Re: Segment busting out [msu79gt82]
Aug 03, 2005 (6:36 am)
Also, don't forget all the refinancing that is still going on with the relatively low interest rates. People are mortgaging their homes to help pay for their cars. If these real estate "bubbles" pop in some markets, it could get interesting.
#3315 of 10348 Re: CR Luxury Sedan Rankings [markcincinnati]
Aug 03, 2005 (6:36 am)
It does seem odd to compare the cars compared.
The 5 cars CR tested (RL, A6, STS, M, GS) ARE the very cars this thread is all about Where is the oddity? The inclusion of the Avalon is a clearly annotated Large Sedan Extra, printed at the end of the LPS review as an add-on - CR would have tested it anyway!
#3316 of 10348 Re: prestige sells [mariner7]
Aug 03, 2005 (6:42 am)
... word is Nissan finally decided to go ahead with the next Q. It should be finally a player in its segment. Acura is said to develop a car above RL, with V8 and optional V10 (meant for next NSX), a proper rwd from Honda at last.
All the reports I've read are saying 2010.
#3317 of 10348 Re: Segment busting out [cstiles]
Aug 03, 2005 (6:43 am)
If these real estate "bubbles" pop in some markets, it could get interesting.
Relatedly, if short term interest rates rise, people who've financed homes with ARMs will have to come up with more cash than they expected for interest.
#3318 of 10348 Re: prestige sells [mariner7]
Aug 03, 2005 (6:56 am)
Let's agree to agree!!! There are many variables/factors which determine a individual's motivation to select one luxury vehicle over another. In my research, here are the factors:
1. Styling - good looks
3. Pricing - getting a good deal - more value for the money invested
7. Previous experiences with a specific brand/model
8. What the "so called" experts say about the competition
9. What their friends/associates/family have experienced with a model/brand
There are others, but the above represent what a cross-section of consumers use in guiding their purchasing activities.
If anyone says that prestige does not play some role in luxury car buyers' decision-making processes, then something is wrong somewhere with that individual. All of the above play a role, to a greater or lesser extent, depending upon the individual purchasing the vehicle.
I use all of the above when making decisions to purchase a vehicle, and more. After one explores, logically, the benefits of one vehicle over another (objectivity), personal tastes/motivations eventually play a role (subjectivity).
SO LET'S AGREE TO AGREE ON AT LEAST THIS ISSUE - OK?
#3319 of 10348 Re: prestige sells [hihomike]
Aug 03, 2005 (7:01 am)
I agree, but would add "uniqueness" to the list. I think that some people prefer to have something that few others have, like the MB G-class.
#3320 of 10348 Re: Segment busting out [msu79gt82]
Aug 03, 2005 (7:05 am)
"Uh this is America the land of indebtedness - most folks have no problem whatsoever living in debt up to their eyebrows."
My European boss once commented that many Americans are "house poor" and "car poor". His point was that Europeans spend a smaller percentage of income on houses, and cars, and more on what they consider higher priorities, such as vacations, clothes, restaurants, art and culture.