Luxury car sales plunge

Are the rich really feeling the economic slowdown? Probably not - if this turns out to be a recession, most of the pain will likely be felt at the lower end (subprime mortgages, higher gas prices, etc.). And yet, a new report from Autodata (via Robert Frank's Wealth Report) shows that March sales of luxury cars fell 14 percent for the month. And sales of super luxury vehicles (we're talking Bentley, Rolls and Maybach) dropped 39 percent. Lower luxury (BMW 1 and 3 series, and the Mercedes “C” Class) held up better than middle luxury (BMW 5-Series, Jaguar S-Type, Infinity M35), which didn't fall as much as upper luxury (Mercedes E-Class, BMW 6- and 7-Series, Maserati Quattroporte). The super luxury class fared the worst. The question is why. Frank did some snooping.

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.”