U.S. Vehicle Market is Coming Back to Life; Nov. Manheim Used Vehicle Index Hits a Record High
In Germany, Mercedes Benz and BMW — both heavy seasonal advertisers this year — have shortened holiday breaks for autoworkers in response to the demand for sales. Audi, the luxury side of automaker Volkswagen, also plans to gear up production this month.
"When you see the luxury segment start to recover, it's a good sign for the rest of the economy," said Peter De Lorenzo, a Detroit-area auto analyst who operates the website autoextremist.com. "In general, the auto industry is definitely on an upward trajectory," he added. "The luxury automakers, who took a big hit the last couple of years, are definitely showing signs of rebounding. It is probably a sign that the economy is not going to go gangbusters overnight, but is going to improve with slow and steady progress."
With consumers coming back to auto dealers' showrooms in recent months (there was a 17.5% increase in November sales vs. last year that followed strong double-digit sales gains in both September and October), the strong demand has allowed automakers to cut back on discounting and incentives, which then results in the following:"Whether the year-end deals are a bargain for consumers is another matter. Edmunds.com, a Web-based consumer auto site, found that despite the heavy advertising and glossy commercials, the average incentive spending per car rose only $31 between October and November, when the holiday discounts were supposed to be kicking in. The average incentive per car in November was actually down $255 compared with November 2009, when auto dealers were desperate to lure any shoppers to the showroom."