What Luxury Brands Are Holding Up To These Tough Economics Times?

With the US economy still suffering, many automakers philosophies have shifted from trying to gain ground in the market, to how not to lose as much ground as your competitors.   As hard to believe as it is breaking even may be the best strategy for the next few months.

Scanning through the figures for March it is difficult to see a winner anywhere in the mix, manufacturers are gaining and losing in a cyclical pattern.  Up on month then down the next.  However there are some trends emerging with the top three Japanese Luxury Brands and the Top 3 European Luxury brands.  But who it winning and who is losing ground over the last six months. We will start at the bottom of the heap first.

Acura -15.53% (Down 14,876 units)

Uninspiring designs, a failure to offer anything not found with less expensive Honda models, and lackluster performance have devastated the brand as they continue to spiral downwards.  Acura is down over 15% in sales over the last six months on top of the fact last year’s sales were down on the prior year’s numbers.   I wouldn’t want to put Acura in a grave just yet, but you might want to start looking at funeral plots.

Lexus -6.49% (Down 10,484 units)

I am quite surprised to see Lexus suffering so badly, after all if you look at the monthly percentages it doesn’t seem to add up.  However the way Lexus reports figures with the DSR method, can lead to deceiving percentages that only are uncovered by raw data comparison.  The most disturbing trend is the methodical loss of more and more sales each month.  Could it be Lexus buyers are hanging on by their bootstraps weathering the storm?  Or are there underlying issues with the brand?

Audi -6.33% (Down 3,081 units)

With such low volumes you can rise and fall pretty easily percentage wise.  Losing 3,081 units of sales over 6 months may not be much to Lexus or BMW, but to Audi it brings them in at third from the bottom.  The key factor here probably was a disastrous December when the factory ceased most incentives effectively killing any forward momentum.

BMW -3.82% (Down 5,496 units)

With sales pretty close to that of Lexus, BMW has had a few disastrous months in a row tempering recent sales success over the last few months. However BMW has lost only half as many unit sales when compared to Lexus. Couple this with relatively stable losses and a host of new model introductions for the rest of the year, and you see BMW may be well situated to weather the storm. As a matter of fact BMW may over take Lexus if the market continues to soften.

Infiniti +0.46 (Up 302 units)

See what I mean about just holding even?  After a disastrous previous 12 months Infinti has started to show signs of returning.  Badly needed new models and a successful niche above parent Nissan have given the brand new life.  Acura needs to take a look at Infiniti’s play book and take a few notes.  Infiniti survives because they offer more than the parent brand and the buyer knows it.  In this case hold on means winning market share.

Mercedes-Benz +3.01 (Up 3810 units)

What can we say here?  Perhaps new models in the lineup, or probably more to the effect that Mercedes sells more upper crust models than the others.  For some reason Mercedes is showing it’s true inner strength, battling a downhill market and actually maintaining momentum.  Perhaps their buyers are best insulated from the economic woes than the others? Or perhaps since Daimler has jettisoned Chrysler, they now can focus on what they do best.

Summary

Obviously the next 6 months are going to be interesting to say the least. Will Lexus follow Acura in to the depths of recession, and can Mercedes maintain the up hill battle?

As a group the Japanese big three have lost 7.77% in sales losing 25,058 units in sales. 

 But this is not the whole story, maybe the bigger story here, is the fact that those losses were 5 times that of the European big three over the course of the last  six months The European only lost 4,767 units in sales.
 

 Take a look at the figures, and tell who will be the winner at the end of 2008.