Credit crunch
Not all dealer showrooms are feeling the credit crunch pinch
Despite deepening fears about the global credit crunch and rising oil prices, car sales in Europe and North America held up surprisingly well in the first quarter of this year. But after April nerves started to fray as it became clear that the West would do well to escape full-blown recession. Housing markets collapsed, the credit crunch tightened, fears about global warming increased and oil bounced further upwards towards an inconceivable $140 a barrel – and to a fiver or more a gallon at the pumps in the UK.
The outlook is not entirely bleak. It now looks like the Jeremiahs among the oil industry analysts, who just a few weeks ago were warning that oil could hit $200 a barrel by year-end, were wrong and that it will slip back down below the $100 a barrel mark over the next few months as supplies become freer. But the damage has mostly been done: the showrooms of North America and Europe are emptying of customers and car makers are battening down production hatches.Unless, that, is, you are a player in the high-performance and luxury end of the market. Here, the lesson seems to be that the wealthy have still got it and are still prepared to spend it.
There are problem areas, not least at Porsche, whose sales across Europe fell by 27 per cent to just over 3500 in May. But Porsche’s volumes are now so high – above 100,000 cars annually – that it has become more vulnerable to the vagaries of the wider new-car market, and 911 sales were virtually on hold as buyers waited for the July arrival of the latest 997 model. Even so, assumptions that the Cayenne must be a disaster area for Porsche in the US don’t stand up. July’s sales were less than 200 down, at around 1000, compared with July last year, and for the first seven months as a whole they were almost 500 up on last year; hardly a disaster.
The men at Ferrari are also looking relatively cheerful. European sales in May jumped by nearly 20 per cent, to around 330, buoyed by new models like the 430 Scuderia. Meanwhile, Maserati’s May sales were up an astonishing 40 per cent, those of Audi’s R8 virtually doubled, Aston Martin chief exec Ulrich Bez reckons Aston remains on target to sell close to 5000 in Europe alone and Mercedes-Benz is getting a real lift from its new-generation SL and SLK models. Bentley, Lamborghini and Jaguar are also holding up well.
The Chinese, Russians and Indians are helping out, though. In fact the rate of their car markets’ growth is hard to grasp. JD Power, the automotive industry consultancy, forecasts that China’s new-car market will soon have more than doubled, to over 9 million, in just five years – and their burgeoning numbers of newly rich want cars at the top of the heap.
Just to play safe, however, even some of the high-performers are ratcheting down production. JD Power estimates Ferrari has already cut output by 200 cars so far this year, Bentley by 500, Lamborghini 100 or so and Jaguar its XK by almost 1500.
But the underlying message of the market remains clear: those making cars that the wealthy want to buy look set to ride the storm far better than Ford or General Motors.
