Chrysler Prez Says Era of Luxury Car Coming to a close

08/15/96

Reuters reported that Chrysler Corporation President Robert Lutz told an automotive conference that the industry was in the throes of a protracted, and probably permanent drop in luxury car sales. Lutz said that cars in the $18,000-to-$26,000 price range have become so technically advanced that there are mainly only superficial differences between them and expensive luxury cars.

"I think we're entering an era where the large part of the American public is finding it more and more difficult to justify $30,000, $40,000, $50,000 for an automobile," Lutz said. "All of the exotic stuff that you used to have to buy a BMW or a Mercedes for is now available from Neon on up." The Neon is Chrysler's entry-level car.

Chrysler's most expensive car, the Chrysler LHS sedan, costs just over $30,000, base. The carmaker sells Jeep Grand Cherokee Limited models for a few thousand dollars more. Lutz said Chrysler has no plans to offer a full-size luxury sport utility vehicle because of the limited market.

Lutz pointed out that aluminum multivalve engines, anti-lock four-wheel disc brakes and sophisticated suspension systems are now available on many mid-priced cars. Power windows and leather seats--once the exclusive domain of luxury cars--are now available on many small cars.

Some industry analysts disagree with Lutz's analysis of the market, however, indicating that Chrysler may be basing its luxury car views on the 7 percent decline the Big Three saw in their luxury car sales from January through July and the 2 percent decline in Japanese luxury labels. The European luxury car makes, however, have surged to a 9 percent increase in first half sales.

Paul Dever -- The Auto Channel