Luxury cars and yachts are now taking the hit...
Recession Hits the Bentley Crowd
The Mercedes crowd (i.e. mass affluent) has been getting squeezed by the economic slowdown for months. Now it appears the really rich are also slowing down their car purchases.
According to the March sales report from Autodata, sales of luxury cars fell 14% over the previous year. Yet sales in the super luxury segment (Bentley, Rolls and Maybach) fell an even larger 39%. Bentley posted the biggest drop of the three, with sales falling 42%.
Of all the luxury-car segments, the top of the market suffered most in March. The “Lower Luxury” market — cars like the BMW 1 and 3 series, and the Mercedes “C” Class — suffered a 13% drop. The “Middle Luxury” segment — BMW 5-Series, Jaguar S-Type, Infinity M35 — fell 20%. “Upper Luxury” — Mercedes E-Class, BMW 6- and 7-Series, Maserati Quattroporte — fell 24%. Luxury sports cars were down 31%.
What gives? I called Richard Kovacs, a straight-shooting sales exec at Bentley Fort Lauderdale, who told me that there were two factors at work. First, Bentley released its coveted GTC last year, and there were so many back orders that sales went through the roof. Now that the pent-up demand has been met, orders have leveled off.
Second, Mr. Kovacs says the wealthy are reacting to the economy. They may not be hurting financially, he says, but they’re becoming more conservative. Traffic in his showroom has slowed, although he says he’s closing deals with a higher percentage of customers. Overall, he says sales are off “a little bit.”
In 2000, Mr. Kovacs said his phone went quiet due to lack of business. What’s his phone telling him now?
“My phone is telling me it’s going to be a tough summer,” he says