Is the Luxury Car Market Slimming Down?

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With recent reports that Maybach, Mercedes' wallet-busting line, is likely going the way of the dodo, it looks like the high-end car market may be preparing for hard times. From the mid-1990s on, cheap credit and rising lifestyle expectations fueled a boom in luxury cars. But as many consumers face lowered possibilities and prepare for a leaner future, the idea of paying $40,000 for a car -- much less the $358,000 (and up) that a Maybach commands -- seems a bit foolish.

While Maybach is the most recent model to speed down the road to nowhere, it follows some of the flashiest and most popular brands of recent years. While each soon-to-be-extinct car line is disappearing for unique reasons, the overall story seems to be pretty consistent: a tough economy translates into tough choices, which often translate into leaner sales.

Maybach: Mercedes' Super Premium Offering

According to Luxist, Maybach, Mercedes' star-crossed attempt to enter the super-premium automobile market, is entering its final act. Launched in 2002, the marque was available in two models, the 57 and 62 (these refer to its length in decimeters). The base price of a Maybach 57, the brand's entry-level model, is almost $100,000 more than that of Rolls Royce's base model, and its sales have been consistently less than a third of those of the more famous brand. This came to a head in 2009, when Maybach sold only 66 cars, a 45% drop from the previous year.


While sales of top-end luxury sedans are declining across the market, the Maybach has some distinct problems of its own. Largely based on the Mercedes S-Class platform, the car is broadly perceived as a gussied-up version of the lower-priced car. In some ways, this perception has proven true: according to reports, the Maybach will be replaced by an elevated version of the S-Class, scheduled to be released in 2014.

Still, the Maybach has its fans, notably Jay Leno. The Tonight Show host, a noted car collector, has a Maybach 57 in his collection and was one of the brand's early adopters. Perhaps he'll pick up one of the last models: The final version of the car, which will be unveiled in late April at the Beijing Auto Show, will have a slightly new look, with a restyled grille and redesigned LED lights.

Hummer: Gas Guzzling Status Symbol

During the 1991 Gulf War, the lightning-fast defeat of Iraq had an unintended effect. As America watched the war unfolding on their TV sets, many became entranced by the Humvee, the army's seemingly-indestructible next-generation jeep. While AM General, the vehicle's makers, released a civilian version the following year, the brand really took off in 1998, when General Motors bought the brand. While the first civilian version had been limited to super-wealthy consumers, the beefy, oversize SUVs quickly gained a broader market, becoming the car of choice for macho drivers with deep pockets.

Eventually, GM introduced new models, for a total of three. The original civilian version of the military vehicle was designated the H1, while the smaller H2 and H3 vehicles were cheaper and a bit more more fuel efficient. But excessive gas consumption was also part of the brand's cachet: while GM was not required to post the fuel rating of the H1, the H2 had a reported rating of less than 10 mpg, and the H3 -- the most fuel-conscious of the three -- was rated at 15 mpg.

From its inception, the Hummer was a lightning rod for environmentally conscious critics who eyed its low mpg rating with a distaste that bordered on obsession. But in 2008, as gas prices topped $4 per gallon, even the brand's fans began questioning the wisdom of driving the steroidal gas guzzlers. GM's then-president, Rick Wagoner, announced that the company was undertaking a "strategic review" of the Hummer, and was considering selling it. Shortly afterward, Indian automakers Tata and Mahindra both made a play for the brand, followed by various other manufacturers.

Unfortunately, with the recession gathering steam and gas prices still a threat, the brand's value continued to fall, and the sales fell through, one after the other. In 2009, as Hummer had a dizzying 67% year-over-year drop in sales, GM finally struck a deal with China's Sichuan Tengzhong heavy machinery company. In February, the sale fell through, and GM announced plans to shut down the brand.

The Lincoln Town Car: Old Reliable

While Hummer's stratospheric rise and meteoric fall happened within a scant decade, the Lincoln Town Car has been a perennial big seller since its release in 1981. Currently the most popular limousine/fleet car in the U.S., it is also the most expensive base-model American luxury sedan, with a sticker price that starts at $46,925. Among other options, Ford offers an optional ballistic protection package that adds about $100,000 to the bottom line.

The Town Car's biggest problem is partially an outgrowth of its continuing popularity; for the most part, Ford (F) has allowed to model to languish for decades. While the Town Car underwent styling changes in 1995 and 1998, it didn't have a major engineering change between 1990 and 2003, when the suspension got an update. Even so, in 2007, the car was still getting low marks for handling and critics highlighted its "marshmallow" suspension.

Still, the Town Car remains the largest sedan for sale in the American market; combined with its longevity and comparatively low price, it is still a good deal for fleets. But fleet sales are less profitable than retail sales, which may explain its murky future. While Lincoln spokesman Mark Schirmer would not confirm reports about the car's demise, there are rumors that Ford will halt retail sales after 2010, and the company has announced plans to "extend" fleet sales through 2011.

Changes in an American Favorite

For almost a century, cars have been an integral part of the American identity, symbolizing everything from personal wealth to economic philosophy, political outlook to favorite color. And the recession doesn't seem likely to change that: while public transportation initiatives and green technologies may change the face of the American automobile, it is hard to imagine an America without a car culture.

That isn't to say that car culture won't change. Just as the expansive, angular forms of 1970's cars gave way to the rounded, aerodynamic models of the mid 1990's, it seems likely that America's favorite status symbol will continue to morph, perhaps developing a greater focus on sustainability and efficiency. And with gas at a premium, perhaps size will become less important.

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