2015 Audi R8 Competition
Luxury automobile leases are about 50 percent of all luxury transactions and in some areas the lease market consumes much more of luxury spending, according to a new report from Cars.com.
Consumer confidence has been rising, giving more individuals the confidence to invest in bigger purchases, such as luxury cars. Luxury automakers have seen an overall increase in sales this year, indicating that consumer interest has risen, a trend that will likely cause brands to increase their marketing and research spending to meet the demand from consumers.
"Luxury automakers are selling an experience, a brand image, not just selling the metal and the plastic and the leather. It is about the lifestyle they are selling," said Jesse Toprak, chief analyst for Cars.com, Chicago.
"You can see that in consumers' choices that a lot of people are extremely loyal to their brand in the luxury market and a lot of people won't consider another brand," he said. "It goes beyond the functionality of the vehicle and is about the prestige of the brand."
Positive thoughts
Industry-wide new car sales increased 5.4 percent, but the luxury market saw a higher increase with 7.3 percent. Part of this increase was a result of the higher consumer demand for small SUVs. In November, luxury SUV sales were up 4.1 percent.
Audi saw the biggest jump in sales this year with a 15.4 percent sales increase. Lexus and Porsche also saw sales changes over 10 percent.
BMW finished fifth in the year-to-date sales change, but in November its 3-Series was the best selling luxury vehicle.
BMW 3 series
In December, Audi saw its 47th consecutive month of record sales in the United States. A lot of these sales are attributed to the brand’s SUVs. The Q7 saw a 14.6 percent increase in November and the Q5 had a 16.8 percent increase in the month.
Last year, luxury automobiles also saw strong sales numbers (see story).
Audi Q7
The leasing market holds many of the transactions for the luxury automakers. In Los Angeles, 65 percent of all luxury transactions are luxury vehicles.
"Leasing is really propelling a lot of newcomers to the luxury market," Mr. Toprak said. "Some very attractive lease deals are convincing people who are becoming more affluent to get into their first new luxury vehicle."
Luxury auto brands are holding leasing deals through the holiday season to entice consumers to spend some of their holiday budget on a new vehicle. Most of the deals are for about a three year lease and the deal ends on Jan. 5.
Forward thinking
Looking toward 2015, luxury automakers are expected to see another sales increase. This is evident through the new models that are expected to be released next year and likely due to the falling gas prices across the country.
Luxury automakers are keeping excitement high as the end of the year approaches with a number of concept releases during the Los Angeles Auto Show.
From super sports cars to hybrid technology, luxury brands are giving fans a strong sense of what 2015 will entail. The continual pageant of auto shows can easily siphon a brand’s stored-up developments, but many automakers parcel out ideas in ways that satisfy end-of-the-year demands (see story).
Outlook for the upcoming year is predicted to be positive because of the new technology, new models and the stock market.
"The projection for next, as long as the stock market goes up, we will have a good year," Mr. Toprak said.
Final Take
Nancy Buckley, editorial assistant on Luxury Daily, New York