Mercedes-Benz had an enviable first-quarter and managed to find itself back on top of U.S. luxury sales, icing out its chief rival BMW after two years of living in its shadow. Mercedes reportedly sold 78,256 vehicles within the first three months of 2021, thanks largely to its crossover vehicles.
It’s a year-over-year increase of 16 percent and helps to explain why the brand is relegating the CLS to a single trim while expanding its options for heavy hitters like the GLC Class. But Mercedes’ recent success may have more to do with the way the luxury segment is rebounding as a whole. As pedestrian models are finding themselves coming out of the pandemic with fewer customers, especially of the subprime variety, high-end luxury brands are enjoying clearer skies.
Passenger car sales were down roughly 10 percent last year (compared to 2019). But vehicles stickering for over $80,000 saw their sales doubling in the fourth quarter of 2020. Tyson Jominy, vice president for data analytics at J.D. Power, said things were going even better for cars priced over $100,000.
“There’s a fairly fantastic wealth effect going on,” he told CNN last week.
While the glorious feeling of knowing the rich are getting richer probably doesn’t extend to the single parent that’s trying to scrape together enough dough so their Nissan Sentra doesn’t get repossessed, Jominy’s right. The comeback for luxury brands has been going more smoothly than nameplates catering to regular folks, at least when you’re taking in the big picture. J.D. Power suggested crediting young wealthy people who haven’t had enough to do during lockdowns.
“[The] rich Millennial tech employee in Austin is now the archetype,” Jominy explained.
That terrifying sentence is likely true and probably explains why every brand is dumping billions into development programs designed to deliver the trendiest EV the world’s most brilliant minds can manage. Of course, the majority of the premium brands we have numbers for (Tesla doesn’t like to share) owe almost the entirety of their sales volume to internal combustion vehicles retailing well below six figures. For example, Mercedes’ best seller is the aforementioned GLC and it starts around $44,000. While you can absolutely configure one to surpass $80,000 with a minimum amount of effort, most people aren’t going to run straight to the V8-equipped AMG variant.
But it’s still an aspirational car and that’s where the money is likely to be. People who write code for a living aren’t the ones reeling from modern times. It’s the person who lost just their low-level job at the textile mill, plastics plant, or foundry. Many mainstream automotive manufactures saw quarterly volumes increase by more than double-digit percentage points in America, but they were cut a little deeper by the pandemic this time last year and domestic brands are still struggling rather badly (partially due to the semiconductor shortage). Dodge fared particularly poorly, losing roughly 28 percent of its previous Q1 volume. Ford only able to claim a 1 percent improvement against the first three months of 2020 and Chevrolet endured a modest, 2-percent sales loss that was offset for General Motors thanks to gains from GMC.
Mercedes’ 78,256 first-quarter sales pale in comparison to their overall volumes, but it still represents a 16 percent (year-over-year) gain for the company without including van sales. Meanwhile, Lexus saw Q1 deliveries improve by 32 percent with 74,253 units and BMW jumped 20 percent with 71,433 cars. Other premium brands also saw noticeable improvements — Acura, Audi, Cadillac, Porsche, and even Buick enjoyed substantial increases in volume against the previous period. This was almost universally supported by extremely high utility/crossover volumes. Even Genesis, which is heavily dependent upon its sedans, saw a whopping 108-percent gain in the first quarter due to the GV80.
Though not every premium name can have a permanent residence in Xanadu. Lamborghini and Ferrari ended 2020 with a bang, however, Rolls-Royce had a terrible year after enjoying a rather solid 2019. Of course, the first quarter of 2021 resulted in Rolls having a 62 percent (year-over-year) global improvement that resulted in its best-ever sales period. That helped to further juice BMW’s worldwide Q1 results of 560,500 deliveries, a 36 percent sales boost from the previous year.
Now seems a good time to be a purveyor of high-end automobiles.