New Battle Looms Among Luxury Automakers

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NBC News

Aggres­sive com­pe­ti­tion among lux­ury automak­ers is aimed at the under $50,000 mar­ket, where many buy­ers want to be – and automak­ers want to sell cars.

Find out more about automaker com­pe­ti­tion in this afford­able lux­ury market.

The Cadil­lac ATS at the North Amer­i­can Inter­na­tional Auto Show in Detroit, 14 Jan­u­ary 2013. The car is GM’s model in the bat­tle with other lux­ury automak­ers for the under $50,000 market.

Look­ing to drive in lux­ury for less than $50,000? Right now may the best oppor­tu­nity in years to get the model you want at the price you want. Thanks to a com­bi­na­tion of aggres­sive lease deals and more choices for entry-level lux­ury, Mercedes-Benz, BMW, Lexus and Cadil­lac, sales for less than $50,000 are soar­ing.

“The bat­tle among lux­ury auto brands to cap­ture buy­ers with mod­els under $50,000 is the fiercest it’s ever been,” said Edmunds.com’s Jes­sica Cald­well. “Look at all the mod­els out there right now in that price range. They are all very good mod­els, so there are more choices for first-time buyers.”

Edmunds.com crunched the num­bers for CNBC and found almost two thirds of the mass-market lux­ury mod­els sold in the U.S. go for less than $50,000.

As automak­ers are bat­tling it out with entry-level lux­ury mod­els, they are push­ing the sweet spot to a higher trans­ac­tion price between $40,000 and $49,999.

One of the main rea­sons entry-level lux­ury sales are surg­ing is the aggres­sive leas­ing deals being offered by automak­ers. “It’s not uncom­mon to find leases adver­tised with monthly pay­ments under $500 or even $350,” said Caldwell.

Leas­ing has long been the pre­ferred method for sell­ing high-end cars. After all, even the wealthy who can afford to buy a $60,000 or $70,000 car, don’t care for the idea of pay­ing that much in one lump sum.

What has changed is that lux­ury automak­ers are now real­iz­ing that they attract a broader base of cus­tomers if they can offer entry-level mod­els for under $400 a month. Once the cus­tomer is locked in, the lux­ury brands believe the qual­ity of the cars and the pam­per­ing deliv­ered at lux­ury deal­er­ships will keep cus­tomers com­ing back.

 

 

 

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