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With recession fears, housing market worries and high gasoline prices, retailers have been facing tough times and so have luxury car dealers. March proved another tough month for carmakers, with overall U.S. sales declining after the weakening economy put a curb on consumer spending. Amid the challenging market conditions, even the rich are joining the general anxiety. With the dollar losing ground each day it is difficult to know how much your savings are valued at any more. Then, a simple question appears "Can I afford to buy a luxury car?" It seems like not too many gave a positive answer as most luxury car brands faced sales declines last month.
Sales for BMW fell 8.7%, while Lexus saw a plunge in sales of 13.6%. And even Mercedes-Benz was down nearly 4 percent. Overall luxury vehicle sales fell almost 13% compared with the same month last year, according to Autodata.
That decline confirms the fact that even the rich are not immune to market woes. According to Mike Jackson, CEO of nation's largest new-car dealership chain AutoNation, they "just want to see that the worst is over." A survey made late last year by Unity Marketing also showed that nearly 4 out of 10 consumers with an average annual income of $155,700 planned to spend less this year on luxury goods.
On the heels of these disappointing results, luxury car makers still have a beam of hope as they believe that new models that will come on the market by year's end will get back people's interest in cars. Despite the fact that people "are a little cautious right now," BMW is seeing its new models cars "on everyone's shopping list."
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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