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US luxury sedan sales collapse

Friday, November 03, 2017

WHEN financial markets surge to new records, sales of luxury cars usually rise, too. Instead, October US auto sales reports on Wednesday showed that a collapse in sales of luxury sedans is accelerating.

Consumers have gradually shifted over to luxury sport utility vehicles from sedans in the last decade, but the trend - which has occurred in both the non-luxury and luxury segments of the auto market - was particularly pronounced in October.

Sales of Daimler AG's Mercedes-Benz S-Class, long a global benchmark for large, premium sedans, plunged 49 per cent in October, and are down 24.8 per cent for the year to date. General Motors Co's Cadillac brand said it sold just 779 of its CTS sedans in October.

Demand for that car, designed to compete with German luxury sedans, is down nearly 33 per cent for the year.

Cadillac's best-selling model this year is the XT5 compact SUV, which has more than doubled sales from a year ago.

The shift within the luxury vehicle market away from sedans toward SUVs of all sizes is forcing some of the most prestigious brands to scramble to add SUV models to their lineups or boost SUV production to meet demand.

"In the short term, there will be pressure to add (consumer) incentives, cut production or both," said Cox Automotive analyst Michelle Krebs.

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