Historically, luxury cars have fared better than lower-end vehicles during market downturns. Unfortunately for luxury carmakers, this year’s sales slump is affecting high-end makes on the same scale as others.
According to the market research firm Autodata Corp., U.S. luxury car sales fell 30% compared to last year. That drop mirrors the 31.9% decline in sales for the auto market as a whole, The Wall Street Journal reports.
Luxury-car makers say that the sales slump is due in part to image concerns among potential buyers.
"People don’t want to look like they have money now," said Mark Templin, group vice president of Toyota Motor Corp.’s North American Lexus division.
To cope with the luxury market’s downturn, automakers are running much higher incentives on their vehicles than ever before. Last month’s average incentive on premium cars was $8,100, last year the average incentive was $3,430.