The hard sell

Desperate to move stock, prestige marques are borrowing some tactics from less salubrious competitors. But wait, there's more...

Desperate to move stock, prestige marques are borrowing some tactics from less salubrious competitors. But wait, there's more...

Everything must go! Save thousands while stocks last! Massive genuine savings! If you’ve turned on the television or opened up a newspaper in the past few months, you won’t have failed to notice that the top end of the car market is suddenly sounding a lot like the bottom. Drive-away deals, free fuel, free servicing – this is how they shift those ratty Korean hatchbacks, isn’t it?

Not any more. When the banks sent the global economy into a skid, luxury car makers were left with acres of shiny vehicles spinning their wheels. Typically, Australian importers must wait months after placing their orders with Europe for the cars to arrive on the boat – long enough, it turns out, for the “stronger for longer’’ resources boom to become the “weaker and deeper’’ recession.

Buyers who had been fuelling the top-end boom with bonuses and stock options decided they didn’t need another depreciating asset. And the Rudd Government’s impeccably timed increase in the luxury car tax gave any waverers another reason not to buy. Showroom traffic slowed to a crawl and demand for luxury wheels is now down by about one third – much worse than the car market as a whole. At the same time, dealers have been caught in the credit squeeze, and so the cost of filling showrooms with stationary metal has increased substantially.

However, even a car industry in first gear must keep polishing its range with annual upgrades, and build plates don’t lie. They may be gleaming in showrooms but as the months pass cars rapidly lose their balance sheet lustre. Age does weary them and luxury buyers who demand the latest thing can see the wrinkles.

To a greater or lesser extent, most brands have shed their inhibitions and joined the spruikers in an effort to jump-start sales. Regardless of how upscale they appear, it seems, scratch any car salesman and underneath ... is another car salesman.

Drive-away pricing, a favourite tactic of Korean brands, has become respectable. A willingness to talk price – as opposed to sweetening the deal with treats from the options list – is not only acknowledged, it’s actively encouraged. “Make us an offer” is now part of the luxury lexicon and, amazingly, Mercedes broke the ice with its Let’s Talk ads. The company aims to clear a backlog of 2400 cars early this month, with soon-to-be obsolete E-Class large executives and CLKs placed in the bargain bin.

Where Mercedes has gone, others have followed, though usually more discreetly. BMW ran a discount event in February and won’t rule out doing it again. Lexus, if it’s lucky, has just cleared old stock after months of run-out deals. Smaller scale operators such as Land Rover, Volvo, Alfa Romeo and Citroen have been falling over themselves to sugar-coat their cars. Meanwhile, low mileage “demonstrators’’, which had helped swell new car sales figures in previous months, are quickly reappearing at a discount.

Some brands have coped better than others, or at least they look as though they have. The years of 30 per cent annual growth may well be over for Audi, but it still has its nose in front. And Jaguar has leapt ahead with its new XF.

But they are the exceptions. For once, when the luxo makers say there will never be a better time to buy, it might actually be true. Because sooner or later, many will put their prices up, especially at the very top end. The limp Aussie dollar will lift the price tags on the next batch of Astons, Bentleys and Rolls-Royces when – or maybe if – today’s overcrowded showrooms finally have some room. 

Philip King is The Australian newspaper’s motoring editor.