Tech Boom Benefiting Certain Luxury Car Brands

Luxury-car sales are up this year amid Silicon Valley’s resurgent technology boom, but not all car brands are benefiting.  Sales of certain upscale car brands in the Bay Area—including Porsche, Aston Martin and Lotus—rose strongly in the first six months of this year versus the same period a year ago, according to data from R.L. Polk & Co., which analyzes the auto industry. At the same time, Rolls-Royce and Lexus, among others, experienced weaker sales over the same period, according to the data.

The disparity is being driven by whether car brands have debuted new models to tempt consumers, say local car dealers. In addition, many buyers are going to the gold standard of brands first before looking at the next tier of vehicles, they say.

The unevenness can be seen at Beshoff MotorCars and Beshoff Infiniti, two dealerships in San Jose that are part of the same auto group. Beshoff MotorCars deals primarily in Mercedes-Benz, while Beshoff Infiniti sells Infinitis. According to the Polk data, Mercedes sales in the Bay Area rose more than 11% in the first half of this year over the same period a year ago to 4,135 cars, but sales of Infinitis fell nearly 17% over that period to 1,313 vehicles.

Phil Garratt, marketing manager for both Beshoff dealerships, said the Polk data mirror what his stores experienced this year. Mercedes had a stronger first half in sales compared with Infinitis, he said, since “in the pecking order, Mercedes is at the top of the tree and Infinitis are in the next group down. In tough times, people always go to the most trusted car brands first.”

Overall, though, luxury-car sales in the Bay Area have outpaced such sales nationwide. Luxury-car sales in the region jumped 11.7% in the first half of 2011 versus the first half of 2010 to 22,328 vehicles, compared with a 7.3% increase in the rest of the country, according to Polk.

At Qvale Auto Group’s British Motor Car Distributors in San Francisco, general manager Vincent Golde said his company has seen weaker sales of some brands like Rolls-Royce this year compared with last. However, he is encouraged by the performance of other brands.

For example, Mr. Golde’s dealership has a two-year waiting list for Lamborghini’s Aventador car, which starts at a base price of $370,000, he said. At the same time, the new Bentley GT models, which typically start at around the $200,000 range, are also highly sought-after, he said.

“There’s definitely pent-up demand in the super high-end luxury car market,” said Mr. Golde. “Clients have the money and just want to feel that they’re justified in buying a new car.”

Source: Wall Street Journal

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