Published April 2003

Luxury vehicles continue
to sell well, dealers report

By Kimberly Hilden
SCBJ Assistant Editor

In late February, consumer confidence dropped almost 15 points across the United States as those surveyed by the Consumer Research Center reported discouraging job and financial markets, the threat of war and rising fuel costs.

Locally, that lack of confidence hasn’t kept consumers from buying luxury cars, Snohomish County auto dealers say.

At Sandberg Northwest Volvo in Lynnwood, General Manager Jim Ault reported that 2003 sales have started out even stronger than last year.

According to Auto Industry Cross-Sell Reports, Northwest Volvo regularly ranks among the top 30 new-car dealers in Snohomish County, selling more than 80 new vehicles during the first quarter of 2001 as well as the first quarter of 2002.

This year, Ault said, there has been an “overwhelming demand” for the automaker’s new sport-utility vehicle, the XC90, which has a manufacturer’s suggested retail price starting at $33,350.

“Not only is it the safest SUV ever built, it’s the most environmentally sensitive SUV,” Ault said of Motor Trend’s pick for 2003 Sport/Utility of the Year.

Volvo’s reputation for safety plays a big role in attracting consumers to the brand, Ault said, noting that his customers run “a pretty broad spectrum” in age, gender and income level.

“Anyone who is interested in safety is going to think Volvo,” he said, adding that the automaker’s low financing rates for select models and cash-back programs also have helped keep sales healthy at his dealership during the past year.

Officials at Acura of Lynnwood, regularly among the top 20 new-car dealers in the county, also report healthy sales despite a slow economy. “It’s been the same for the past three years,” said Dave Cook, a sales manager with the dealership.

According to the Cross-Sell Reports, Acura of Lynnwood sold more than 150 new vehicles during the first quarter of 2001 and more than 180 new vehicles during the first quarter of 2002.

Cook credited the automaker’s product quality and limited supply on the market for creating demand. He noted that models such as the 2003 RSX, a sports coupe with an MSRP starting at just under $20,000; the TL sedan, starting at just under $29,000; and the MDX sport-utility vehicle, starting at $35,700, have been popular of late.

Over at Harbour Pointe Lincoln Mercury, sport-utility vehicles also are in demand, said owner Rebecca Stupey.

For example, the 2003 Aviator, a midsize sport-utility vehicle with an MSRP of $39,255, has been popular with customers, she said.

While sales have remained relatively constant for the dealership, Stupey has faced the challenges that come with the discontinuation of three product lines in the past year: the Lincoln Continental, the Mercury Cougar and the Mercury Villager.

“You try to keep your volume up by selling more of the car lines that you have remaining,” she said. “But as some go away, some new ones are coming on board.”

Like the Mercury Monterey, a new van to replace the Villager expected this fall, Stupey said, adding that other car lines are expected to replace the Cougar and Continental.

Manufacturer incentives, including reduced financing APRs, owner loyalty incentives and customer rebates also have helped the dealership’s bottom line, she said.

“The economy has been a bit stagnant for probably the past year, and people will hesitate sometimes, even in an upper-income category, they’ll be ‘let’s wait and see.’” Stupey said. “That’s why so many of the manufacturers are offering such low APRs. If you think about a $35,000 or $40,000 vehicle at zero percent over five years — maybe that will stop them from being so hesitant.”

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