LexFather

http://www.autoblog.com/2009/10/14/r...the-new-black/

Up until very recently, the reason that you bought a BMW 3 Series or a Mercedes-Benz C-Class was to prepare you to buy a 5 or an E in a few years. You know, ladders to climb, blowing up to do, de-luxe apartments in the sky to own. These days, according to a new study, that is less and less the case: fewer premium buyers are moving up and more buyers are actually moving down.

According to numbers compiled by the Power Information Network, in 2006, nearly 16% of new car buyers moved from a compact to a mid-sized car, but through the first half of this year, only about 11% did so. And compared to 2006, this year two other categories showed 4% gains: people moving from large to mid-sized cars, and those moving from mid-sized to compact cars.

Gas prices have a bit to do with that, as does the democratization of high-end features, but the real story appears to be that unless David Stern signs your paychecks, being a baller is out. Customers don't want to look like they're flaunting their money, or they simply don't want to spend it. Even brand-loyal buyers are either keeping their cars, or instead of buying new ones they're going for pre-owned certified or an off-lease deal. Even Acura and Lexus are seeing their customers turn their aspirations downward.

According to Automotive News, brands that appear to be poised to benefit from this trend include Hyundai and Audi. The Korean firm's Genesis sedan is an all-the-luxury-you-want option for $10,000 less than most comparable brands. Less flashiness and an engineering-led message could also be the catalyst for Audi, whose sales declines are a third of the luxury market's overall. Said Scott Keogh, Audi's chief marketing officer, "There is affluence, and consumers have means, but frivolousness has gone away."

[Source: Automotive News, sub. req'd]

FKL

lol...some writers call Audi the most opulent and arrogant of them all, some the leader of understatement. Which are they??

rominl

iTrader: (4)

i thought this is pretty normal considering the economy. if today economy has a V shape recovery, i am sure the survey will say upgrades to higher level again

TRDFantasy

Here it is:

Audi executives and leaders are called arrogant, which in quite a few cases is true. Some of their press releases even prove it.

Audi owners are called arrogant and as having "opulent" taste because Audi in the past few years has been a very cool and "it" car brand.

Audi products are understated and reserved in terms of styling, because most of the products look very similar and have very subtle design cues.

GS69

When it Comes to Premium Cars - Conspicuous Consumptoin is Out, Frugality is In

Before the global economy started to circle the drain, it was natural for premium vehicle buyers to progress through the model hierarchy – that is to move from a vehicle like the BMW 3-Series to the larger and more luxurious 5-Series. However, the recent economic downturn has changed the way most American’s think, with vehicle downsizing becoming increasingly popular.

According to the latest survey from J.D. Power and Associates’ Power Information Network, far more premium buyers are moving down the vehicle hierarchy rather than up. That is a big change from just a few years ago when most buyers steadily moved up through the model ranks.

“Since 2006, we have seen buyers less willing to trade up and an increasing number trading down in their purchase,” Geoff Broderick, PIN general manager, told Automotive News.

In 2006, 15.9 percent of premium buyers moved from a compact model to a more up-scale mid-size model. However, that trend reversed during the first half of 2009, with only 11.5 percent of buyers making the jump to the mid-size ranks.

The change has been even more pronounced in the mid-size to large transition. Whereas 8 percent of buyers made the switch from mid-size to large offerings in 2006, only 4.5 percent of premium buyers have done so in 2009.

On the reverse size, downsizing in the premium segment is more popular than ever. Just 12.6 percent of buyers made the move from a large offering to a mid-sizer in 2006, but 16.2 percent of buyers have made the move down-scale in 2009. The switch to compact vehicles is even more popular, with 14.8 percent of buyers – up from 10.8 percent – going from a mid-size to compact.

There are certainly many factors behind the new downward trend, but the death of conspicuous consumption is leading the rally. The wealthy can still afford to purchase the best an automaker has to offer but, in the current economic climate, it’s no longer fashionable to flaunt one’s money.

“People can afford an S class,” Bruce Schulman, general manager of Beverly Hills Mercedes-Benz, told Automotive News, “but they are getting an E-Class in the same color because they have laid off people or have upcoming union negotiations. They don’t want to be seen as having luxury in this situation.”

The new trend is affecting almost every premium automaker, including Mercedes, BMW, Lexus and Acura, with some buyers making the switch to cheaper alternative from Audi or even Hyundai. The trend has even boosted pre-owned vehicle sales. While there is no denying the down economy is changing the tastes of luxury buyers, it remains to be seen if the new trend will remain constant or revert back once the global economy improves.

IS-SV

"it's the economy"

Threxx

I'm glad to see materialism is losing popularity... or at least it's kinda going out of style. I've gotten so tired of seeing 40 thousand dollar millionaires everywhere.

Och

iTrader: (3)

I don't know how much of that article is true. I think the real reason that people aren't "moving up in class" is because even the entry level luxury cars have gotten so good. They all have definitely grown up in size, and all have added so many bells and whistles that were only available in upper class vehicles in the past.

IS-SV

Good point, when you look at the quality, safety, chassis sophistication, luxury features, power of the latest smaller premium models (which really aren't that small at over 180 inches long and 3600 pounds plus curb weight).

Stormforge

i kinda agree and disagree with this report. take me for instance, i upgraded from a 99 acura 3.2TL to 08 GS450h. love the way my GS drives and handles, and would not go back to my TL if you paid me. i recently drove an 04 4-cyclinder camry as a courtesy car - yuck! the camry was comfortable and functional, but it was lacking in so many ways compared to my GS. of course there is a big price difference between a camry vs GS (not to mention 4 yr difference in technology, but still). even my 9 yr old daughter said the camry was a piece of junk compared to our GS and RX, and i agree.

the point i'm trying to get across is that once you are accustomed to a certain kind of ride quality, driving experience, luxury, etc, it's very difficult to downsize to a lesser vehicle. why eat macaroni and cheese dinner if you can afford a T-bone steak with all the trimmings? both are nutrious and satisfy your dietary needs, but only the latter can really satisfy your craving for meat (imho). using this same analogy, why drive a lesser luxurious vehicle when you get afford a more expensive luxurious vehicle that provides a better driving experience (i'm not just talking about handling and performance, but other factors like quality, luxury, reliability, etc, etc.)? now if i downsize to a less luxurious vehicle, it's not by choice but external factors that are beyond my control (ie: unemployment, debt, etc).

on the otherhand, if i can find a similar luxurious vehicle as the GS for cheap, then why not. hyundai genesis and equus would receive serious consideration in a comparison with lexus/mb/bmw/audi, if i were to go shopping for a new car.

just my 2 cents.