By Claudia Parsons and Poornima Gupta
NEW YORK, April 8 (Reuters) - Luxury car makers see light at the end of the tunnel by the last quarter of 2009 in the U.S. auto market, and some are seeing bright spots already, executives at the New York Auto Show said on Wednesday.
'There's a certain amount of angst out there with everything that's going on in the economy, but still there's a lot of people out there who are interested in rewarding themselves,' Mick Pallardy, Porsche vice president for the eastern United States, told Reuters.
'It's challenging but we see bright spots out there. We definitely see things percolating back, we see a bit of pent up demand and some spring market activity,' he said.
Luxury car manufacturers prospered in the last decade as easy credit prompted U.S. consumers to go on a buying spree that many in the industry thought would last for years.
That ended painfully last year with the global credit crunch that has plunged the U.S. economy into recession and created a backlash against lavish and conspicuous spending.
General Motors Corp's Cadillac luxury brand saw a 20 percent decline in U.S. sales last year.
Rivals also fared poorly. Daimler's luxury brand Mercedes-Benz U.S. sales declined 11 percent, BMW sales were down 15 percent, Porsche was down 25 percent and Toyota Motor Corp's Lexus sales fell 21 percent.
BMW North America Chief Executive Jim O'Donnell forecast credit markets would ease towards the end of the year, helping the auto market.
U.S. automakers reported sales approaching a 9.9 million vehicle annualized rate in March, a bump up from rates seen in the first two months of the year, but still far below the 15.1 million rate a year earlier. The sales rate during the first quarter was 9.5 million units.
'I think there's maybe a little bit too much pessimism,' O'Donnell told Reuters. 'I don't see the market falling below 10 million.'
'I think it will pick up in the final quarter, maybe from September onwards I think we'll start to see year on year increases,' he said.
He said buyers of luxury cars were hurting like everybody else, 'but I think there's some of them are just holding back a little bit, they don't want to be seen to be doing too much when maybe some of their employees are suffering.'
He said there had been an upturn in used cars, with sales of certified pre-owned BMWs topping 100,000 in 2008, a rise of more than 16 percent. Pre-owned sales are also up 18 percent so far this year in the United States, BMW said.
Audi head of marketing Peter Schwarzenbauer said the German high end car maker was doing better than its competitors in the premium segment by raising spending on marketing, such as a high-profile ad during the Super Bowl, and would stick to that strategy rather than launching incentive schemes.
Audi, a Volkswagen unit, sold 90,400 cars worldwide in March, a 10.7 percent fall year-on-year. Its U.S. sales were down 16.2 percent in March.
'On a world-wide basis, we have so many stimulus programs in place that they must show a certain effect,' Schwarzenbauer told reporters. 'Our assumption is that especially here in the United States, the fourth quarter is probably the first time we are going to see the light at the end of the tunnel.'
He said a U.S. recovery in late 2009 should help lead the rest of the world out of the downturn in 2010.
(Editing by Bernard Orr)
((New York Equities Desk; tel: +1 646 223 6000)) Keywords: AUTOSHOW/LUXURY (For more news about General Motors Corp click here:) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, April 8 (Reuters) - Luxury car makers see light at the end of the tunnel by the last quarter of 2009 in the U.S. auto market, and some are seeing bright spots already, executives at the New York Auto Show said on Wednesday.
'There's a certain amount of angst out there with everything that's going on in the economy, but still there's a lot of people out there who are interested in rewarding themselves,' Mick Pallardy, Porsche vice president for the eastern United States, told Reuters.
'It's challenging but we see bright spots out there. We definitely see things percolating back, we see a bit of pent up demand and some spring market activity,' he said.
Luxury car manufacturers prospered in the last decade as easy credit prompted U.S. consumers to go on a buying spree that many in the industry thought would last for years.
That ended painfully last year with the global credit crunch that has plunged the U.S. economy into recession and created a backlash against lavish and conspicuous spending.
General Motors Corp's Cadillac luxury brand saw a 20 percent decline in U.S. sales last year.
Rivals also fared poorly. Daimler's luxury brand Mercedes-Benz U.S. sales declined 11 percent, BMW sales were down 15 percent, Porsche was down 25 percent and Toyota Motor Corp's Lexus sales fell 21 percent.
BMW North America Chief Executive Jim O'Donnell forecast credit markets would ease towards the end of the year, helping the auto market.
U.S. automakers reported sales approaching a 9.9 million vehicle annualized rate in March, a bump up from rates seen in the first two months of the year, but still far below the 15.1 million rate a year earlier. The sales rate during the first quarter was 9.5 million units.
'I think there's maybe a little bit too much pessimism,' O'Donnell told Reuters. 'I don't see the market falling below 10 million.'
'I think it will pick up in the final quarter, maybe from September onwards I think we'll start to see year on year increases,' he said.
He said buyers of luxury cars were hurting like everybody else, 'but I think there's some of them are just holding back a little bit, they don't want to be seen to be doing too much when maybe some of their employees are suffering.'
He said there had been an upturn in used cars, with sales of certified pre-owned BMWs topping 100,000 in 2008, a rise of more than 16 percent. Pre-owned sales are also up 18 percent so far this year in the United States, BMW said.
Audi head of marketing Peter Schwarzenbauer said the German high end car maker was doing better than its competitors in the premium segment by raising spending on marketing, such as a high-profile ad during the Super Bowl, and would stick to that strategy rather than launching incentive schemes.
Audi, a Volkswagen unit, sold 90,400 cars worldwide in March, a 10.7 percent fall year-on-year. Its U.S. sales were down 16.2 percent in March.
'On a world-wide basis, we have so many stimulus programs in place that they must show a certain effect,' Schwarzenbauer told reporters. 'Our assumption is that especially here in the United States, the fourth quarter is probably the first time we are going to see the light at the end of the tunnel.'
He said a U.S. recovery in late 2009 should help lead the rest of the world out of the downturn in 2010.
(Editing by Bernard Orr)
((New York Equities Desk; tel: +1 646 223 6000)) Keywords: AUTOSHOW/LUXURY (For more news about General Motors Corp click here:) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.