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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