2014 Has Been Great for Luxury Auto Brands, but What Should We Expect From August?

Times seem to be good for luxury automakers in the U.S., with 12 of the top 15 brands posting year-to-date sales gains through July. 

Of those 12 brands, nine of them have posted double-digit sales gains, and only one posted a sales gain of less than 8%: Jaguar. 

There are however, three brands that have struggled. Acura, Cadillac, and Volvo have seen sales slide 1.8%, 2%, and 11.1%, respectively, in 2014. 

 

Source: Data from GoodCarBadCar.net, chart by author.

You may notice that there are only 14 brands above, with the missing piece being Maserati, excluded because its 328% sales gain skews the data too much and would render the chart nearly unreadable. Among one of the largest surprises to me -- or, should I say, disappointments -- is Cadillac. 

After sales surged 22% in 2013 amid the company's success with the ATS and XTS models, and upon Cadillac winning the 2014 Motor Trend Car of the Year award for the CTS, I thought that 2014 would be another strong year for General Motors' (NYSE: GM  ) luxury line.

Instead, sales have stagnated and been unimpressive. Its cross-town rival, Ford's  (NYSE: F  )  Lincoln brand, has had the opposite luck, with sales climbing 15.9% so far this year. 

Toyota Motors'  (NYSE: TM  )  Lexus brand has also done well, with a 17.4% increase in sales, and as a whole, luxury sales have been strong. 

So, what can we expect for August? 
According to J.D. Power & Associates, August seems to have been a good month. A few quotes from the report show positive signs for the auto industry this month:

Summer is shopping season when it comes to new vehicles, and August is no exception, as new-vehicle retail and total sales are on pace to surpass May for the highest levels in 2014, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

Retail light-vehicle sales are projected to hit 1.3 million units and total light-vehicle sales are expected to reach nearly 1.5 million in August 2014, both a 3 percent increase on a selling day adjusted basis, compared with August 2013. ...

August sales will benefit from the inclusion of the Labor Day holiday in the month's sales results. Labor Day is traditionally the biggest single sales day of the year as consumers take advantage of the holiday and model year-end sales promotions as well as the availability of the 2015 model-year vehicles arriving in showrooms. ...

The average new-vehicle retail transaction price in August 2014 is $29,300, a record high for the month, surpassing $28,898 set in August 2013.

Unfortunately, the forecast above does not provide specific breakdowns as to which segments are performing the best or how well they are faring. Kelley Blue Book shows a slight slowdown in most auto segments for August, the lone exception being in the compact SUV/Crossover segment. 

However, I think luxury car sales will do OK, if not more than OK. For the year, the segment has performed very well, which is impressive given the fact that the vehicles are generally more expensive than cars in other classes. 

Cadillac CTS, winner of Motor Trend's Car of the Year. Source: General Motors.

Seeing as there hasn't been much of a downtick in either the labor market or the U.S. economy, I see no reason for there to be a sudden downtick in luxury auto sales, either. 

Final thoughts
Although the "market share leaderboard" tends to vary from month to month, we can expect to see either BMW, Mercedes-Benz, or Lexus lead the charge. Each month this year, each of these three automakers were in the top three in total luxury sales, according to GoodCarBadCar.

Notable others such as Audi, Cadillac, and Infiniti generally round out positions four through seven, while smaller and oftentimes more luxurious rides round out the bottom in terms of market share (think Bentley, Maserati, and Porsche). 

Overall, sales seem likely to fall within a few percentage points of year-ago figures, but I wouldn't expect anything catastrophic. The auto market -- and luxury rides in particular -- continues to prosper thanks to a recovering economy.

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  • Report this Comment On August 31, 2014, at 9:32 PM, DocG1956 wrote:

    August?

  • Report this Comment On September 10, 2014, at 9:28 AM, Bkenwell wrote:

    Hey Doc --

    August sales results are release in the beginning of September. I can see where your confusion stems from!

    Hope this helps.

    -Bret

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