Luxury cars - the rich and the recession

By: Drivers.com staff

Date: Wednesday, 29. October 2008

"Recession? What recession?" asks Toronto Sun writer Mike Strobel as he track-tests the Aston Martin V8 Vantage coupe around the Mosport race track in southeast Ontario.

Boston automotive marketer Beth Paretta is introducing Strobel to the V8 Vantage and Strobel revels in the power. "There is nothing quite like 420 horses and an open road, I don't care what the Green Party says," he writes.

His view is echoed by 38-year-old software magnate Christopher Whittier, whose Bentley is parked in the racetrack parking lot. Whittier likes the V8 Vantage but he’s "saving" for a Bugatti Veyron (1001 hp, 250 mph top speed and $1.6m price tag). Whittier says he keeps a "lexus beater" for mundane tasks such as grocery shopping.

Anthony Poole, a Toronto luxury car dealer, tells Strobel his Aston Martin sales are up 20%. His Rolls Royce sales have doubled and Jaguars are up 15%. Poole has arrived at the track in a $220,000 Aston Martin DB9. "There's a lot of old money around," he says. "Sure they lost some money today and they might lose or make some more tomorrow. But it's not really a factor of their purchasing or lifestyle."

Down in California's Silicon Valley, weekly newspaper MetroActive reports desolation in the auto market but a "silver lining" in the luxury market.

"The auto row of Los Gatos Boulevard is turning into a ghost town, with dealerships abandoning shop left and right," says MetroActive, but Silicon Valley Auto Group's four showrooms offering Bentleys, Aston Martins, Rolls-Royces and Lamborghinis seem to be doing OK. "Moral," says MetroActive in an October 8th article, " in tough times like these, it's good to have lots and lots of money."

Where the luxury market seems to be hurting most is in the "aspirational luxury" segment, writes Chris Woodyard in an April, 2008 USA Today article. By 'aspirational' he means newcomers to upscale living who are apparently backing off mid-luxury purchases.

However, even the very wealthy may be backing off as well due to an "image problem." With public anger at the shenanigans in the financial stratosphere at an unprecedented level it may be time for the ultra-moneyed to lay low for a while.

"Despite the fact that there are a number of people who still have plenty of dough to purchase these expensive toys," writes auto blogger Jeremy Korzeniewski, "public perception is causing some of them to hold back and keep those fat wallets in their pockets."