Luxury Car Sales Down

May 23, 2008

The slumping housing market is effecting more than foreclosure rates. The entire U.S economy is feeling the effect of a weakening housing market and a credit crunch due to sub prime adjustable rates mortgages going into default and America’s debt amount growing at record speed.

Despite the attempts of the Federal Reserve and the government to stimulate the sagging economy just about all sectors reported major losses.

Luxury automobile sales saw a 13% decline as recent reports show, which is among the worst in the past several years. While high end luxury goods rarely see such a decline in sales, luxury car makers are still optimistic that sales will improve near the end of the year with the introduction of the 2009 models.

Lexus saw the most dramatic drop is sales at 13.6% followed by BMW which fell only 8.7%. While the rich may not be feeling the economic crunch as closely as other demographics they do understand the importance of holding off until the time is right. Reports show that the rich are more prone to waiting to see how financial crisis play out before buying lavish purchases like luxury cars.

Consumers making about $155,000 in annual income will be the ones more likely to hold off on luxury purchases. Instead of seeing the rich buy items that are a bit below their financial capabilities this group of consumers seems to be favoring the wait and see method.

In certain areas the luxury car market does not seem to be on a decrease but this does not necessarily guarantee that these businesses will remain safe.

Luxury car dealers seeing the most losses tend to be in states that are being hit the hardest by the mortgage crisis such as Florida, California, and Nevada.

While the Upper Class may not feel the credit crunch as painfully as others the fact that the ripples of the mortgage crisis are being felt so far up the ladder is disturbing to many.

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