Luxury Cars' Rough Road

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Washington DC August 26, 2008; The AIADA newsletter reported that those shiny and expensive Lexuses and Lincolns on dealers' lots are no longer immune from the demons that have driven the auto industry into the ditch. According to South Carolina's The State, the luxury-car business — once thought to be recession-proof — is down thanks to a shaky economy plagued by high gas prices and tight credit. "The stock market probably has more of an effect on luxury-car buyers than the price of gasoline," said AIADA Chairman Jim Hudson, majority owner of Jim Hudson Automotive Group, which includes a Lexus dealership. Sales of Toyota's Lexus, the leading luxury brand leader in the United States, are down 15 percent. The Honda-built Acura is off 14 percent. Meanwhile, BMW and Mercedes are hanging tough. BMW is down 3 percent while Mercedes is up 2 percent. For his part, Hudson remains optimistic, noting that gas prices have fallen and oil consumption in the first half of 2008 dropped an average of 800,000 barrels a day. "I see that getting stronger and stronger," Hudson said. "I think the worst is behind us."

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