Polk Research: Why Are Luxury Cars Losing Sales In America?

In the first quarter of 2010, luxury car sales were up 8 percent. So what’s the problem? Well, the rest of the light car market grew by 26% in that same period—which means that the luxury market decreased about 1.5%, from a former share of 9.4%.
Polk Research, the firm that organized these sales trends, points to five categories within the luxury-car market: Basic, for entry-level cars like the Nissan Maxima and Infiniti G37; Mid, like the Cadillac CTS; Prestige, like the Lexus LS; Prestige Sporty, like the Porsche range; and Roadster, like, well, the Mazda MX-5. The American luxury market mostly consists of the first two categories, for an 82% lion’s share, and the Cadillac CTS is the best-selling luxury car in America, at 7%.

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Ferrari To Idle Engine Plants, Lay Off Workers

Ferrari might be opening a theme park this fall, but there’s already trouble brewing in the automotive world’s Magic Kingdom as the Italian automaker takes steps to idle one of their engine plants and lay off 600 workers after demand for Ferrari engines utilized by sister brand Maserati has fallen.

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Volkswagen to Overtake General Motors as World's Second-Largest Automaker

Due to a predicted decrease in output at General Motors for 2009, it is expected that the U.S. automaker will be surpassed by German rival Volkswagen AG by the end of this year.

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Auto Sales Slump Continues With 36.5 Percent Drop for March

Hyundai performed well above the industry average for March, which may be one of the main reasons by both Ford and GM have copied the Korean automaker’s job-loss protection incentive. (Photo Credit: Liberty Cars]

Well, it ain’t getting any better. The recession continues to bully automakers as creditors continue to bang on their front doors

The industry average for car sales in the U.S. for the month of March is 36.8 percent below last year – and to a certain extent that sugar coats the problem as many of the major automakers posted worse numbers.

General Motors once again has the dubious distinction of the worst sales with a decline of 44.7 percent. Ford did only slight better less-worse with a decline of 42.1 percent. Chrysler was down 39.3 percent.

And it’s not just the Big 3 that are hurting. Toyota was down 39 percent and Honda dropped 36.3 percent and Nissan 37.7 percent.

Hyundai was one of the few companies to not take a serious hit, with sales decreasing just 3.3 percent. The Korean auto manufacturer has implemented a it’s assurance job-loss protection program and while it’s not clear if that is the reason for the considerably above-average sales, both GM and Ford recently announced similar programs.

Low consumer confidence and a tight credit market continue to be two of the main factors discouraging car sales. Confidence, especially in almost bankrupt companies like General Motors and Chrysler continues to be a major reason for stalled sales. Access to credit has improved slightly, however, something BMW President Jim O’Donnell sites for the less than awful 22.9 percent decline in his company’s sales.

The Obama Administration is also helping increase access to credit by forcing GM’s credit provider GMAC to resume subprime lending.

According to Standard & Poor’s equity analyst Efraim Levy, this may finally be rock bottom for the industry, but that doesn’t mean things are about to improve soon. “We believe we may be at or near the trough of the industry’s year-to-year comparisons but do not see an uptick in industry demand before fourth-quarter 2009 at the earliest.

[Source: Automotive News]

Follow the jump for a full list of manufacturer sales numbers

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Cadillac To Hault Sales in Half of Europe

Cadillac has made the move to stop selling its vehicles in half of the European countries it currently has a presence in – this according to a report in Automotive News. There is no word on exactly which of the 25 countries will be affected but two markets that are guaranteed to still carry the Cadillac brand are Russia and the U.K.

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Toyota Predicts Loss, Lamborghini Slows Production

Toyota Motor Corp stock decline over the past 12 months. Source www.BigCharts.com
According to Bloomberg news, Toyota will soon announce a possible dividend cut or profit loss. Following the announcement by Toyota Motor Corp. President Katsuaki Watanabe, stocks dropped (just 0.2 percent) but still remained strong.
Bloomberg sources the Nikkei English News, which doesn’t give a source, but states that Toyota may actually post an operating loss of $1.7 Billion. It would be the first loss in the company’s 71 year history.
Toyota’s US sales fell 34 percent last month.

The news also brought about some market turbulence in German where both Daimler and BMW posted three percent losses for the day.

Meanwhile, Lamborghini has announced that even the ultra-rich are not free from the economic woes. While they do expect to post another record sales year, production will be slowed as the company will add an additional eight days to its Christmas brake.

Exotic car manufacturers, it should be noted, are in a unique position during such dire financial times as they rely on a pre-ordering process with lengthy wait times for customers. This means that sales of 2009 vehicles more accurately represent the 2007 marketplace as orders would have to have been placed much earlier. The advantage for companies like Lamborghini or Ferrari is that this system gives them a significant amount of time to react to an economic downturn.

[Source Bloomberg & Bloomberg]

Official Toyota Sales figures after the jump:

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