Luxury-car buyers spending less this yule

DETROIT — This holiday season, the luxury-car buyer is offering a simple phrase: I'm not spending too much.

Wealthier shoppers are trickling back into showrooms after staying away much of the year. But there's a catch. Many are pinching pennies, sort of, by choosing smaller BMW and Mercedes models, or they're buying top-of-the-line cars from cheaper brands.

This year, almost 14 percent of luxury buyers replaced old vehicles with brands other than traditional high-end names such as Audi, BMW, Cadillac, Infiniti, Jaguar, Lexus, Lincoln, Mercedes and Porsche. That's up from just 4 percent in 2006 and a reminder that these buyers still don't feel as wealthy as they once did. Home values are still down and portfolios shrunken, despite the stock market's gains this year.

Two potential beneficiaries of the shift are Buick and Hyundai, brands offering luxury models that are much cheaper than Beamers and Audis.

Buick for years was known for cushy, boring sedans normally found outside grandma's house. The average Buick buyer is still about 70 years old, and the brand is desperately trying to attract younger drivers and reverse a sales slide, says Aaron Bragman, an auto industry analyst with Global Insight in Troy, Mich.

This may be its opportunity.

After years of ho-hum styling, blase interiors and soft suspensions that made driving a chore, Buick's new LaCrosse luxury sedan is far sportier than its predecessor. It's got crisper handling and sleeker styling designed to appeal to people in their 40s and 50s. It also includes on-board hard drives and other electronic gizmos for younger drivers, all while costing $5,000 to $20,000 less than European and Japanese luxury competitors.

At $27,000, Buick's German-designed LaCrosse performs as well as its more expensive competitors, yet has everything luxury buyers are seeking, Bragman says.

That's important because luxury shoppers are picky, even when they economize. While many are now willing to give up a prestigious name or a bigger car, they still want cutting-edge styling along with reliability and safely. They demand tight handling and a quiet ride. The car must have excellent fit-and-finish inside and out and features such as heated leather seats and navigation systems.

"They may very well be downsizing in terms of the package. They're not downsizing in terms of the features they want," says Art Spinella, president of CNW Marketing Research of Bandon, Ore.