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High-end car buyers want luxury for less Many are replacing Beamers and Audis with Buicks and Hyundais

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High-end car buyers want luxury for less

Many are replacing Beamers and Audis with Buicks and Hyundais

updated 7:23 a.m. CT, Thurs., Dec . 24, 2009

DETROIT - This holiday season, the luxury car buyer is offering a simple phrase: I'm not spending too much.

Wealthier shoppers are trickling back into showrooms after staying away much of the year. But there's a catch. Many are pinching pennies, sort of, by choosing smaller BMW and Mercedes models, or they're buying top-of-the-line cars from cheaper brands.

This year, almost 14 percent of luxury buyers replaced old vehicles with brands other than traditional high-end names such as Audi, BMW, Cadillac, Infiniti, Jaguar, Lexus, Lincoln, Mercedes and Porsche. That's up from just 4 percent in 2006 and a reminder that these buyers still don't feel as wealthy as they once did. Home values are still down and portfolios shrunken, despite the stock market's gains this year.

Two potential beneficiaries of the shift are Buick and Hyundai, brands offering luxury models that are much cheaper than Beamers and Audis.

Buick for years was known for cushy, boring sedans normally found outside grandma's house. The average Buick buyer is still about 70 years old, and the brand is desperately trying to attract younger drivers and reverse a sales slide, says Aaron Bragman, an auto industry analyst with Global Insight in Troy, Mich.

This may be its opportunity.

After years of ho-hum styling, blase interiors and soft suspensions that made driving a chore, Buick's new LaCrosse luxury sedan is far sportier than its predecessor. It's got crisper handling and sleeker styling designed to appeal to people in their 40s and 50s. It also includes on-board hard drives and other electronic gizmos for younger drivers, all while costing $5,000 to $20,000 less than European and Japanese luxury competitors.

At $27,000, Buick's German-designed LaCrosse performs as well as its more expensive competitors, yet has everything luxury buyers are seeking, Bragman says.

That's important because luxury shoppers are picky, even when they economize. While many are now willing to give up a prestigious name or a bigger car, they still want cutting-edge styling along with reliability and safely. They demand tight handling and a quiet ride. The car must have excellent fit-and-finish inside and out and features such as heated leather seats and navigation systems.

"They may very well be downsizing in terms of the package. They're not downsizing in terms of the features they want," says Art Spinella, president of CNW Marketing Research of Bandon, Ore.

Luxury for less

That's just what Craig Bierley, Buick's product marketing director, is thinking. And he says the brand is capitalizing on the trend.

"People are reconsidering the choices on the things they spend money on."

LaCrosse sales took off after a new version arrived in showrooms last summer. Sales rose 63 percent last month.

The new LaCrosse, Bierley says, has quadrupled the number of buyers it attracts from other luxury brands. In December, Buick dealers are reporting even more trade-ins of Lexus and Infiniti models, he says.

Another winner is Hyundai's Genesis, which has received stellar reviews for its luxury and handling but can cost $15,000 to $25,000 less than higher-end cars.

Joan Sher, a Fort Lauderdale, Fla., real estate agent, switched over last month when she gave up her Mercedes GL450 sport utility vehicle for a loaded-out Genesis.

Replacing the Mercedes would have cost more than $60,000, so Sher opted for value and spent $44,000 on the Hyundai.

"It's more affordable but at the same time a very comfortable car," she says.

Even with a small resurgence for the holidays, luxury car sales are down 27 percent so far this year. But November sales fell just 8 percent, and dealers are reporting increased traffic this month.

Those trends reflect revived confidence among consumers. In the third quarter, net worth — the value of assets such as homes, bank accounts and investments, minus debts like mortgages and credit cards — rose 5 percent, to $53.4 trillion, the Federal Reserve says. It was the second straight quarterly increase. Personal incomes rose in November at the fastest pace in six months.

Yet even with those gains, Americans' net worth remains far below the peak of $64.5 trillion reached before the recession.

the rest at the link:

http://www.msnbc.msn.com/id/34578441/ns/business-autos//

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>>"The average Buick buyer is still about 70 years old"<<

Has to be outdated info. Enclave is at what- circa 53 ? That would mean the Lucerne -to balance that out- would be averaging over 90. Or are Lucerne sales so amazingly high to mathematically overpower the Enclave #s ??

It just doesn't ring accurate, since the Enclave is pulling things solidly down ABA-wise.

LaCrosse is going to come in at Enclave ABA numbers too- I have no doubt. This is mercedes ABA range, or from the media's perspective; 'good territory'.

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>>"The average Buick buyer is still about 70 years old"<<

Has to be outdated info. Enclave is at what- circa 53 ? That would mean the Lucerne -to balance that out- would be averaging over 90. Or are Lucerne sales so amazingly high to mathematically overpower the Enclave #s ??

It just doesn't ring accurate, since the Enclave is pulling things solidly down ABA-wise.

LaCrosse is going to come in at Enclave ABA numbers too- I have no doubt. This is mercedes ABA range, or from the media's perspective; 'good territory'.

Has to be outdated. Even the Rendezvous pulled the ABA number down out of the 70s. I can't find the links at the moment, but over the summer Buicks ABA was 1 year younger than Lexus's. Considering Lexus had 8 models at the time (9 now that the HS has joined the lineup) compared to Buick's 3, that is really saying something.

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^ Agreed WRT the Rendezvous, and good point. I realize different sources compile different ABA #s, but "70" is definately off.

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Both the Buick and the Hyundai are great cars.

Got a chance to look at a Genesis sedan at the local Hyundai dealer. Impressive.

Lexus should be worried....very worried.

Chris

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Both the Buick and the Hyundai are great cars.

Got a chance to look at a Genesis sedan at the local Hyundai dealer. Impressive.

Lexus should be worried....very worried.

Chris

Did you drive it? I found the Genesis 4.6 to be better than the CTS DI w/ awd. In tight turns the Genesis has a little roll and it isn't as good as a BMW at steering or handling, but it is dead silent in there, and in a rocket in a straight line. Cadillac should worry too, the Genesis is far superior to the STS and the Equus is on the way. Hyundai market share went from 3% to 4.3% this year, they are the fastest growing brand right now.

As for Buick, the LaCrosse/Lucerne ABA was 67 earlier this year, Enclave I thought was 56 or 57. I believe in 2008, Buick had the highest ABS for any brand. Older luxury car buyers ($35-45k luxury cars, ES350 or DTS for example) I can see going to Buick or Hyundai because you can get most of the same stuff at a lower price. And the DTS and STS are dated, sales of those are off about 60% this year, that type of car will lose buyers to lower end brands. But the performance luxury car buyers I think will stick with performance luxury and want the rear drive and top tier brands like Mercedes and BMW.

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Not suyprised nyou found the sts to be inferior to the Genesis...

Yes, beyond the CTS the Cadillac lineup could ue a little "love"

They are selling quite a few of both the Genesis sedan and Genesis coupe around here...

Chris

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Did you drive it? I found the Genesis 4.6 to be better than the CTS DI w/ awd. In tight turns the Genesis has a little roll and it isn't as good as a BMW at steering or handling, but it is dead silent in there, and in a rocket in a straight line. Cadillac should worry too, the Genesis is far superior to the STS and the Equus is on the way. Hyundai market share went from 3% to 4.3% this year, they are the fastest growing brand right now.

And in the end, it's still a Hyundai. There is no way in hell a CTS gets outhandled by a Genesis. You always find one spec that GM gets beat on... whether it be acceleration times, number of ways the lumbar adjusts, the percieved penis lengthening factor. The CTS still looks better than the Genesis, has a far nicer looking interior, is available in AWD (important to us Pittsburgers no?) At this point the Genesis is a RWD DTS competitor with a more powerful engine but lessor interior.

The STS has.. what a year or two left if that?

As for Buick, the LaCrosse/Lucerne ABA was 67 earlier this year, Enclave I thought was 56 or 57. I believe in 2008, Buick had the highest ABS for any brand. Older luxury car buyers ($35-45k luxury cars, ES350 or DTS for example) I can see going to Buick or Hyundai because you can get most of the same stuff at a lower price. And the DTS and STS are dated, sales of those are off about 60% this year, that type of car will lose buyers to lower end brands. But the performance luxury car buyers I think will stick with performance luxury and want the rear drive and top tier brands like Mercedes and BMW.

Lexus's ABA is 69 this year.

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As of August, the average Lexus buyer was 56. (http://www.worldcarfans.com/109083121414/toyota-concerned-about-aging-owner-base-for-lexus) The ES350 may have an ABA of 69, but the IS and RX are in the 40s. Infiniti and BMW are in the 40s, Jag, Cadillac and Mercedes are low 50s.

The Genesis rides as well as the CTS, probably a little softer, the steering feel is similar, CTS has corners flatter and does handle a bit better. The CTS feels heavy, but in a corner it doesn't get worse, the Genesis doesn't feel heavy in normal driving, but in a tight corner you feel the weight and it leans some. But the Genesis is faster, the V8 is just way better than the CTS's V6, smoother, quieter, more powerful, sounds better. Genesis is roomier, more comfortable, more toys, but the CTS has better wood trim. They are close, each does some things better than the other. Personally I don't care about awd, it just makes the car heavier, had I driven a rear drive FE3 CTS I bet I would have liked it more than the AWD one I drove.

I came across the top 10 cars cross shopped with the new LaCrosse:

Taurus 17%

CTS 10%

Lucerne 10%

Malibu 9%

Genesis 8%

Accord 7%

Enclave 7%

Fusion 6%

Equinox 5%

ES350 5%

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It will be interesting to see what the weak dollar does to this. Betcha it helps Cadillac and Hyundai even more.

Was window shopping a new TT at the local Audi dealer while I was waiting for my daughter to get done with some shoping...

A3 wagon, not much bigger than an HHR...was about 34K with a few options.

I wonder how much nicer an interior GM could put in an HHR for another 20K in transaction price?

Would like to see one more line of Cadillac that is as nice as the CTS. THAT would be killer IMHO.

Chris

Edited by 66Stang
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Has to be outdated info. Enclave is at what- circa 53 ?

I see lots of Enclaves being driven by younger people...the Enclave is not what I would normally be looking for in a car, but I would love to own one.

Like I've said elsehwere, GM's crossovers and small SUV's are the real pride of the fleet IMHO. While we at C and G have all been argueing about B billars and Camaros and Corvettes, GM has very quietly brought out a fleet of first class small SUV's and Crossevers that are the best in the market, period.

Given the number of SUV's, minivans, and crossovers you see in the average mall parking lot, I'd hazzard a guess that GM is a whole lot smarter than we've given them credit for being.

Chris

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Not shocking that folks are finally moving away from dumping big cash into a car. Spending more than 40-50k on a car doesn't have much net benefit other than ego stroking.

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Talk yourself into a test drive of a Z06, R8, 911 GT3, or something of the like. You might disagree.

I'd gladly spend 60K plus for a CTS-V if I had it...

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>>"As of August, the average Lexus buyer was 56"<<

This also rings false, esp when sourced from toyoyo- who has fudged figures to make themselvfes look better countless times before (combining scion & toyoyo ABA numbers, yet calling it all 'toyoto's ABA). Lexus undercutting mercedes in ABA? On what basis ?? The driving experience? The cache' ??? is sells in pathetic numbers- it's not kicking things lower, rx might, but should be offset by the es. ls & sc also sell in pathetic numbers, but they are only going to drag that number higher.

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Did you drive it? I found the Genesis 4.6 to be better than the CTS DI w/ awd. In tight turns the Genesis has a little roll and it isn't as good as a BMW at steering or handling, but it is dead silent in there, and in a rocket in a straight line. Cadillac should worry too, the Genesis is far superior to the STS and the Equus is on the way. Hyundai market share went from 3% to 4.3% this year, they are the fastest growing brand right now.

Callout time for SMK. SMK, you repeatedly state that the 5-series sized CTS sucks at the $35k price point because it can't out handle the 3-series, but now you state that the 7-series sized Genesis is better than the CTS at the 35k price point even though the CTS can out handle it. SMK... it seems you have something against Cadillac.

BTW, the Genesis interior has zero inspiration and all the panache of a 1998 Buick Park Ave. It almost looks as if all they did was copy the Park Ave and update it to modern materials.

112_0810_06z+2009_hyundai_genesis+interior_view.jpg

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Talk yourself into a test drive of a Z06, R8, 911 GT3, or something of the like. You might disagree.

I'd gladly spend 60K plus for a CTS-V if I had it...

i might be tempted to find a used vette or a base v6 camaro and take the 30 grand saved and go back and get an MBA, myself. Or a nice used Yamaha VMax might give me the same thrill for a lot less money. I suppose a trip to the phillipines might do that too though.

Ctsv might be worth it, but considering how the prvs gen ctsvs can be had for 1/3 sticker now, I'd wait a cpl years and save the 40 grand. It will be just as fun to drive an 09 ctsv in 2013 as it is right now.

We always had a lot of buicks in the fam for the exact same reasons the article states.....some good luxury for a good value, not a lot more. A pretty responsible way to get luxury is what Buick can be again, I hope that is where they go with this.

Edited by regfootball
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>>"The average Buick buyer is still about 70 years old"<<

Has to be outdated info. Enclave is at what- circa 53 ? That would mean the Lucerne -to balance that out- would be averaging over 90. Or are Lucerne sales so amazingly high to mathematically overpower the Enclave #s ??

It just doesn't ring accurate, since the Enclave is pulling things solidly down ABA-wise.

LaCrosse is going to come in at Enclave ABA numbers too- I have no doubt. This is mercedes ABA range, or from the media's perspective; 'good territory'.

I thought Buick was down to 61 or somewhere around there? That was at least a couple years ago, so it could be even lower with the Enclave and new LaCrosse on the market.

Edit: did a quick Google search. The average age this year is 62.

Here's Buick's challenge by the numbers: In 2008, 1 per cent – 1 per cent – of Lexus buyers considered buying a Buick. That figure has stayed at 1 or 2 per cent for five years. That's what J.D. Power and Associates says, adding that the average age of a Buick buyer this year is 62. At least the trend is downwards, from 64 in 2007 and 63 in 2008.

http://www.theglobeandmail.com/globe-drive/new-cars/auto-news/changing-peoples-perceptions-of-buick/article1410353/

Edited by mustang84
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Well, different sources will list different ABAs for the same year/make - all depends on their tiny sampling. But yes; low 60s is what I remember reading over the last few years.

-- -- -- -- --

That genesis interior above is lousy. The air bag portion of the wheel is LARGER that it used to be when they first got common in the '90s, it's larger than the one in my '94 F-150. Dated, uninspired, lacking detail... the LaCrosse blows it out of the water in terms of dynamism and inspiration, nevermind the CTS.

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design wise, I would say the current sonata has a more attractive interior than the Genesis and the 2011 Sonata blows it out of the water...

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