WSJ: Luxury Auto Makers Gird for Sales Slump

Washibngton DC October 20, 2008: The AIADA newsletter reported that since about 2002, BMW, Mercedes, Lexus, Acura, Audi, Infiniti and a rejuvenated Cadillac boomed as they lured upper middle class consumers into their showrooms with lease deals and financing that made their cars and sport utility vehicles affordable to everyday Americans. Now, the Wall Street Journal reports that many of these same luxury brands are battening down for a bleak year or two as their sales crumple. During August and September 2007, a BMW 3-Series sedan sold 28 days after it hit the showroom floor, on average, according to data from the Power Information Network. During the same period this year, the average 3-Series sedan sat unsold for 49 days. Johan de Nysschen, head of Audi's U.S. operation, says he sees "an acceleration in the downward trend in luxury sales . . . We are not optimistic this will improve in the short term. We should brace ourselves for more of the same." Still, brands such as Audi, Lexus and BMW – which have developed a wide range of vehicles to broaden their appeal – have a better shot at appealing to a suddenly practical consumer.

For more on where luxury brands see themselves heading, click here.