Luxury Cars Suggest More Models, but Find Fewer Buyers
By NEAL E. BOUDETTE JULY Three, two thousand seventeen
Over the last several years, luxury carmakers like BMW and Mercedes-Benz have added a dizzying array of variations to their model lines, in hopes of attracting buyers from rival brands.
But the strategy is not working out.
Fresh evidence of the auto industry’s woes arrived on Monday, when automakers reported that sales of fresh cars and trucks declined by three percent in June from a year earlier, the sixth consecutive monthly decline. And luxury cars were no exception.
In latest years, the industry has been railing high, with low gasoline prices pushing buyers toward thicker — and for companies, more profitable — cars like sport utility vehicles and trucks. But the luxury sector, so often a bright spot in automakers’ earnings, has lost its gloss.
“The luxury industry is pretty plane right now,” said William Fay, senior vice president of automotive operations for Toyota North America.
Among the luxury brands, BMW suffered a decline of Two.8 percent last month, while sales at Mercedes-Benz fell slightly and Toyota’s Lexus division reported that its new-vehicle sales fell five percent.
The challenges to the category have not been for lack of diversity. The BMW three Series compact, for example, is now available as a four-door sedan, a hatchback, a station wagon, a diesel and a plug-in hybrid. Other variants made from the same basic parts but called the four Series include a convertible, a two-door coupe and a four-door coupe.
Still, sales of BMW three and four cars plunged twenty four percent in two thousand sixteen and have fallen another eight percent this year.
“BMW’s purpose was to increase market share but it’s turned out to be a little bit of cannibalization,” said Shujaat Siddiqui, general manager at Dave Walter BMW in Akron, Ohio. “BMW customers are just moving from one model to another,” he added, but the brand has been incapable to bring in fresh buyers and expand its market share.
To a lesser extent, Mercedes has also expanded its offerings of sport utility vehicles. It liked a big hop in S.U.V. sales last year, but in the very first half of this year they have fallen about Two.Trio percent — at a time when overall sales of S.U.V.s and lighter versions called crossovers are soaring.
The proliferation of models is just one of the problems that luxury-car makers are facing. Another is that American consumers now strongly choose S.U.V.s and crossovers and are moving away from cars, the traditional strength of the premium brands. “We are getting to a point where the market is pushing close to sixty five percent trucks,” once S.U.V.s and minivans are included, Mr. Fay said.
Mr. Fay said Lexus would kick off fresh sales promotions, including increases in subsidized leases and financing offers, to shove Lexus sales through the summer. Two luxury rivals, Acura and Infiniti, spotted big gains in June sales after suggesting discounts and other deals.
Luxury-car makers began to grab an enhancing slice of the American car market as baby boomers reached their peak income years and splurged on upscale automobiles. In 2007, they had 11.8 percent of the market, up from about nine percent in 2001.
After the recession, they developed fresh models in an attempt to proceed the upward trend. Cadillac added a fresh compact, the ATS. BMW built a petite electrical car, the i3. Mercedes developed an entry model, the CLA, to sell for about $30,000 and challenge with mainstream cars like the Honda Accord and the Toyota Camry.
They had some initial success, but many models introduced in the last several years are now floundering. In June, sales of Cadillac’s ATS were just 1,185, thirty seven percent fewer than in the same period a year ago. BMW i3 sales this year have totaled fewer than Trio,000 cars, less than half the rhythm of two years ago. At Mercedes-Benz, sales of the CLA declined eight percent in June — and are down thirty seven percent in the very first six months of the year.
Luxury Cars Suggest More Models, but Find Fewer Buyers – The Fresh York Times
Luxury Cars Suggest More Models, but Find Fewer Buyers
By NEAL E. BOUDETTE JULY Trio, two thousand seventeen
Over the last several years, luxury carmakers like BMW and Mercedes-Benz have added a dizzying array of variations to their model lines, in hopes of attracting buyers from rival brands.
But the strategy is not working out.
Fresh evidence of the auto industry’s woes arrived on Monday, when automakers reported that sales of fresh cars and trucks declined by three percent in June from a year earlier, the sixth consecutive monthly decline. And luxury cars were no exception.
In latest years, the industry has been railing high, with low gasoline prices pushing buyers toward fatter — and for companies, more profitable — cars like sport utility vehicles and trucks. But the luxury sector, so often a bright spot in automakers’ earnings, has lost its gloss.
“The luxury industry is pretty vapid right now,” said William Fay, senior vice president of automotive operations for Toyota North America.
Among the luxury brands, BMW suffered a decline of Two.8 percent last month, while sales at Mercedes-Benz fell slightly and Toyota’s Lexus division reported that its new-vehicle sales fell five percent.
The challenges to the category have not been for lack of multiplicity. The BMW three Series compact, for example, is now available as a four-door sedan, a hatchback, a station wagon, a diesel and a plug-in hybrid. Other variants made from the same basic parts but called the four Series include a convertible, a two-door coupe and a four-door coupe.
Still, sales of BMW three and four cars plunged twenty four percent in two thousand sixteen and have fallen another eight percent this year.
“BMW’s purpose was to increase market share but it’s turned out to be a little bit of cannibalization,” said Shujaat Siddiqui, general manager at Dave Walter BMW in Akron, Ohio. “BMW customers are just moving from one model to another,” he added, but the brand has been incapable to bring in fresh buyers and expand its market share.
To a lesser extent, Mercedes has also expanded its offerings of sport utility vehicles. It loved a big hop in S.U.V. sales last year, but in the very first half of this year they have fallen about Two.Trio percent — at a time when overall sales of S.U.V.s and lighter versions called crossovers are soaring.
The proliferation of models is just one of the problems that luxury-car makers are facing. Another is that American consumers now strongly choose S.U.V.s and crossovers and are moving away from cars, the traditional strength of the premium brands. “We are getting to a point where the market is pushing close to sixty five percent trucks,” once S.U.V.s and minivans are included, Mr. Fay said.
Mr. Fay said Lexus would kick off fresh sales promotions, including increases in subsidized leases and financing offers, to shove Lexus sales through the summer. Two luxury rivals, Acura and Infiniti, witnessed big gains in June sales after suggesting discounts and other deals.
Luxury-car makers began to grab an enlargening slice of the American car market as baby boomers reached their peak income years and splurged on upscale automobiles. In 2007, they had 11.8 percent of the market, up from about nine percent in 2001.
After the recession, they developed fresh models in an attempt to proceed the upward trend. Cadillac added a fresh compact, the ATS. BMW built a petite electrified car, the i3. Mercedes developed an entry model, the CLA, to sell for about $30,000 and rival with mainstream cars like the Honda Accord and the Toyota Camry.
They had some initial success, but many models introduced in the last several years are now floundering. In June, sales of Cadillac’s ATS were just 1,185, thirty seven percent fewer than in the same period a year ago. BMW i3 sales this year have totaled fewer than Trio,000 cars, less than half the tempo of two years ago. At Mercedes-Benz, sales of the CLA declined eight percent in June — and are down thirty seven percent in the very first six months of the year.