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article imageOp-Ed: Why luxury car sales are on the rise

By Anna Johansson     Jun 16, 2013 in Technology
For many Americans, budgets remain tight… yet luxury car sales are rising. Here's a look at why that could be, along with some predictions for what the future holds.
For many Americans, budgets remain tight… yet luxury car sales are rising. In fact, Mercedes-Benz beat BMW and Audi in the second quarter of 2013, which indicated that top-of-the-line luxury is making a comeback.
It might be the introduction of the new A- and B-Class vehicles, which are relatively small and compact, that’s encouraging more buyers to go for the luxury brand. With the introduction of these smaller models, Mercedes saw a 12-percent sales increase over last year.
In total, Mercedes sold 116,566 vehicles in April 2013, but the German manufacturer wasn’t the only firm to see an increase. BMW might be lagging, but the other German carmaker still saw a 7.5 percent increase in the second quarter, for total sales of more than 130,000.
Audi also saw a jump of 6.6 percent for sales that exceeded 133,000. According to analysts, Daimler also has an eye on the prize and hopes to surpass Audi soon.
The race to the top
Adding models that say luxury, but are smaller, seems to be the ticket to increased sales. More people want compact cars, and manufacturers are picking up on that. Each of the three big brands — Mercedes, BMW, and Audi — is racing through 2013 with the goal of finishing with the highest sales figures. According to a spokesperson for Mercedes, the company’s luxury line is expected to keep pace with the competition until the end of the year.
The sales chief of BMW commented that his company will continue to add compact models, such as the BMW 3-series Gran Turismo, which BMW fans already adore. Sales are up in Europe as well as Asia and other parts of the Americas. This is great news after six straight years of struggling numbers, and it’s likely the American and Chinese buyers who are helping to boost sales the most.
Why we love luxury
Even during the recovery from a recession, people love luxury — especially when it can be enjoyed on the road. People are spending more time commuting, which means it’s more important to be comfortable while driving. Additionally, people want to be sure the cars they are driving won’t cause them any problems (not all luxury cars are perfect), and will be dependable. According to analyst Erich Hauser, the luxury brands will recover even more in the second half of 2013 because that’s where people are spending.
However, it’s not just compact cars that are gaining in popularity. For example, BMW’s XI SUV saw a 15-percent sales jump in April 2013, only slightly behind the 16-percent increase in demand for the 3-series smaller car. Consumers are also becoming more interested in luxury wagons as a means of enjoying the finer things while retaining a family-friendly vehicle. Mercedes also expects sales to continue to climb and is adding more shifts to its manufacturing plants in Europe.
Time on the road is time well spent
According to the US Census Bureau, Americans spend an average of 25.4 minutes commuting each day, and some spend much longer in their car. For example, north of Las Vegas, people spend more than 88 minutes doing their commute, on average. With some folks spending more time on the road than waking hours at home, their vehicle has become a second home. Just like consumers want a comfy couch for watching movies, they’re demanding a comfortable car to get them down that long route from point A to point B.
This is great news for luxury car manufacturers and hybrid builders alike. Luxury carmakers might be missing out on a huge population, however, by not including as many gas-savers in their selection as possible. Consumers shouldn’t have to choose between luxury and saving money on gas, which is why models like the new Tesla are so popular.
Regardless, the demand for luxury isn’t diminishing, and demand will undoubtedly lead to more innovation.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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