BusinessWeek: Luxury Car Sales Keep Skidding

BusinessWeek has an interesting article on the latest news in the auto industry and especially, the luxury cars market. As we all know by now, the auto industry is hurting, badly and the prognosis for 2009 is far from positive. Beside the Big Three out of Detroit, all the other carmakers are seeing a drop in sales, this including the luxury car makers, like BMW, Mercedes or Audi, just to name the German ones.

But BMW’s CEO of North America, James O’Donnell seems to keep a positive spirit and says:

“Luxury sales, we believe, will bounce back in the second half of the year,” says O’Donnell, who cites President-elect Barack Obama’s proposed stimulus package and the $700 billion Wall Street bailout for his optimism. “I have heard estimates for the whole industry as low as 10.3 million [vehicles sold] this year, and that just can’t be with all this stimulus.”

BMW has stated many times that the new BMW 7 Series is their flagship, their saviour in 2009, but with the recent acclaimed launch of the 2009 BMW Z4, we can add the new roadster to that list as well. Two great vehicles that have brought something new to the BMW lineup.

And BusinessWeek interestingly writes about some of the smaller players, like Volkswagen, being the ones taking advantage of the situation. As they mentioned, VW offers the German technology and engineering at a much lower price, but…could this be enough to convince the consumer to jump ship?

Here is an excerpt and then the full article:

European luxury-car companies are introducing their usual lineup of new and pricey models at this week’s North American International Auto Show in Detroit. But analysts and some industry executives are unsure about how many buyers there are likely to be this year or even in the foreseeable future.

Sales for all luxury auto brands were down across the board for 2008. In 2009 the luxury segment of the auto industry is expected to fall below 1 million units sold for the first time since 1996, according to a forecast by Global Insight. Sales tracking firm Autodata said sales last year were 1.19 million units, down 21% from 2007 when sales were 1.41 million. Luxury sales have been as high as over 1.5 million in recent years.

6 Responses to “BusinessWeek: Luxury Car Sales Keep Skidding”

Tom says:

January 19, 2009 at 2:20 am

Mr. O’Donnell, denial ain’t just a river in Egypt.

Brookside says:

January 19, 2009 at 7:57 am

The global economic turnaround can’t come soon enough. And the second-half of 2009 sounds optimistic…good luck with that.
Just look at the numbers from the Business Week article.
If corporate profits usually range in single to very low double digits annually then these drops of 20%+, no matter how well corporations are financed, are more than just a hardship. Tough times.

Gragop says:

January 19, 2009 at 12:11 pm

It’ll rebound. Give it time, it’s to our benefit now that luxury car sales are sliding – at least if you’re buying a new car.

That said, Audi surpassed BMW for the sport sedan niche in Germany with the A4 outselling the 3 Series. So, people are still buying them and not everyone seems to be hurting as much.

Ray Shan says:

January 19, 2009 at 1:14 pm

all your links go back to your blog, should at least link to the BW article you’re talking about

Horatiu B. says:

January 19, 2009 at 1:22 pm

@Ray Shan: Ray, thank you. The copy and past didn’t work so well last night at 1 am.

Thanks for pointing out, it was my intention from the get-go to link to them for the full article

Artmic says:

January 19, 2009 at 10:57 pm

Guys i know this is a big deal about Obama being black and all and being president.

But for the love of god, is everyone gone insane in the country?
THey are shopping obama gear like he was some super-tonic that will cure all ills of the world. From books, comics, water, cookies, shirts, pants, shoes to calling him the messiah.

When you look at the people he is getting into his “Change” government, you will notice no change, just same old lobbyists, ex-clinton people, and this is change?

So this dumb fuckTard says the luxury car segment will bounce back in the second half of 2009 because of the Obama Stimulus package and 700 Billion bailout? WHAT A LIAR, or ignorant idiot. or both.

Stimulus package, how much will an individual get? 10,000 for a down payment on a new 5 Series? lol or 500 dollars?

As for the 700 billion bailout, that is really 7 trillion with fractional banking “Practices”…. and what has that done so far? NOTHING. and it will do nothing, the banks will just play with the money and buy anything that is weak, while the every day joe-six pack looks on as his living standard, and pension gets blasted to smithereens.