Luxury Car Makers Say Sales Won’t Yield to Economy
Economic slowdown? Nasdaq stock crash? Slowing car sales?
No problem, say makers of some of the world’s most expensive cars.
European luxury auto makers at the New York International Auto Show were glowing with optimism that the slowing economy and other woes won’t hurt sales of their pricey marques.
The thinking is, anyone who is wealthy enough to insist on the very best won’t let some tech stock losses keep them from forking out $228,000 for Aston Martin’s 12-cylinder Vanquish or $219,000 for Bentley’s Arnage Red Label, both introduced to North America on Thursday during the preview for the New York show.
Jaguar and Land Rover also had North American debuts of less-expensive luxury models amid optimism of increasing sales even though the overall U.S. market is expected to shrink by about a million units this year.
“In the first quarter of this year, we sold 194 Rolls-Royces and Bentleys, versus 191 in the first quarter of last year,” said John Crawford, U.S. director of public relations for Rolls-Royce & Bentley Motor Cars Ltd.
And most of the Bentleys were the $360,000 two-door Continental T and Azure convertible--hardly a sign of rich consumers retrenching.
Also, luxury makers say, their customers believe the economy’s likely to get better.
“This is an issue of confidence more than affluence,” Crawford said. “The overwhelming impression I get from our dealers is that there is faith that the economy will rebuild.”
Bentley may have sold only 595 cars in the U.S. last year, mainly in the New York area, Florida and California, but it was an all-time high in a year when the U.S. market for passenger cars and trucks set a record of 17.4 million vehicles. Though most estimates put 2001 overall sales at around 16.5 million units, Bentley is optimistic that it’s driving to another record.
Aston Martin, the elite British sports car maker owned by Ford Motor Co., has “gone from a maker of a very small number of handcrafted cars to being a world leader in sports car technology,” said Bill Donnelly, president of Aston Martin North America.
So what do you get for $228,000? The V12 Vanquish, Aston Martin’s most technologically sophisticated car with 460 horsepower and a top speed of more than 190 mph. But don’t go running to put in an order: The car already is sold out through 2003. Due in part to the Vanquish, the company expects a 50% growth from its record worldwide sales of 1,000 of its exclusive cars last year.
Aston Martin’s 17 U.S. dealerships will grow to 35 in three years, Donnelly said, as two women in slinky black outfits and belts made from handcuffs lounged by the sleek, low-slung car.
The economy in a funk probably won’t keep prospective Aston Martin buyers from purchasing the exclusive cars, but self-restraint in tough times might. People don’t want to be perceived as engaging in conspicuous consumption when others are tightening their belts, Donnelly said.
There’s no shyness at Jaguar, which introduced the entry-level X-Type to North America on Wednesday with the buoyant expectations that the car will more than double Jaguar’s sales in two years.
“We’re speaking to a whole new Jaguar generation,” said Michael O’Driscoll, president of Jaguar North America. “We’re selling for the first time to the under-40s and for the first time a car under $30,000.”
Jaguar’s worldwide sales last year were 90,000. “This car’s going to take us to 200,000 by 2003,” O’Driscoll said.
Land Rover, the upscale sport-utility vehicle maker that, like Jaguar, is owned by Ford, unveiled the 2002 Kalahari version of its Discovery II sport-utility vehicle. The specialty rendition features heavy-duty, off-road components such as a black rear ladder and roof rack and a more rugged look.
It has a 4.0-liter aluminum V8 engine with 188 horsepower and will sell for about $40,000 when it becomes available in October--rather affordable for a luxury SUV.
Eventually, all of Land Rover’s models--including the flagship Range Rover, which starts at $62,000, Defender and soon-to-return-to-the-U.S. Freelander--will have Kalahari versions.
Land Rover sales were up 12% in March, said Howard Mosher, chief executive of Land Rover North America. March was a month when many other auto makers reported sales declines.
Although he expects Land Rover sales to decline overall this year, Mosher said the SUV maker plans to go ahead with the Freelander’s reintroduction to America toward the end of the year. It’s a premium small SUV that will sell for less than $30,000.
