Some may think that regardless of the economic situation, there are still rich people who can afford to buy a luxury vehicle. Well, someone should have reminded the rich folks this year. Apparently, the Great Recession slammed their bank accounts, too. And the result was a decline in sales of luxury cars. During the recession, luxury cars that cost $70,000 and more had sales that fell more than sales of small cars.
Well, things may be getting better for the luxury segment. According to the Detroit News, October sales of luxury cars grew greater than the auto industry sales as a whole by 2 to 3 percent. Sales of Mercedes-Benz in the United States, for example, increased 21.3 percent in October while the market was flat overall. Mercedes identified the introduction of a refreshed S-Class and a new E-Class sedan as reasons for the increase. Daimler had been reporting losses through the first half of 2009. But it experienced a profit in the third quarter of $84 million. Still, that’s 74 percent less than the company earned last year.
However, the profit news bodes well for the entire auto industry because in prior recessions, luxury car sales rebounded faster than mainstream brands and was a precursor of a recovery.
Our take? We don’t buy it. Sounds more like the rich are getting better at hiding their cash from the government. That, or, seeing the recession is not as bad as they thought, they’re cautiously beginning to spend again.
What do you think?
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