Younger, First-Time Owners Driving This Year’s Increase in Luxury Brand Car Sales
Luxury car sales are “booming,” says a report from Time.com, but it might not mean what you think it means for the economy.
More recently, Time reported that overall new car sales rose 40 percent between August 2012 and August 2013 in the United States, an almost 50 percent increase in car sales in just one year alone.
But this year, luxury brands such as Mercedes, Audi, Rolls-Royce and Bentley are also reporting higher earnings in the luxury car market. The two latter brands are often available to only the wealthiest of customers, with vehicles priced in the $200,000 and up category — even for pre-owned models.
Rolls Royce, for instance, has seen a 60 percent increase in sales in Europe alone for the first half of 2014, with a 33 percent increase overall. Total sales for luxury brand vehicles are up 11 percent for the first half of 2014.
So this means good things for the economy, right?
While the increases in luxury car sales could have to do with the growing number of billionaires on the planet — about 219 more this year than there were last year — it might be a different demographic driving these sales.
Some more accessible luxury brands, such as Audi, BMW and Mercedes, have begun offering lower-priced models in the $30,000 range. For Audi, whose A3 starts at $30,000, sales went up 23 percent in June alone.
Audi executives told Edmunds.com that the customers seeking these lower-priced luxury models are often “move-up” customers: younger, less affluent car buyers who were previously driving similarly priced Hondas, Toyotas, Fords and other non-luxury makes, many of whom get their information from social media. These new customers are “wowed” by the fact that they have an authentic Audi or other brand, said Mark Del Rosso, Audi of America chief operating officer.
What’s more is that many of these sales aren’t outright purchases: the number of cars being leased is growing, with more than 28 percent of new cars being leased for all brands; luxury leases are at an even higher percentage, according to the Wall Street journal.
The only luxury brand to lose sales so far this year has been Cadillac, which saw a 22 percent decrease in the sales of its ATS model.