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    Cadillac Grille (Autoblog)

    by: Gary Hoffman | AOL Autos
     

    Consumers are spending again, at least on cars. At dealerships across the country, big SUVs, luxury vehicles, and fully loaded smaller cars are flying off the lots. The trend toward expensive vehicles and models laden with pricey technology has been gathering steam, even in an otherwise weak economy.

    Between June 2009 and September 2010, the average price paid per vehicle -- the so-called average transaction price -- has risen from about $23,500 to $27,229, according to CNW Marketing Research of Bandon, Oregon. In October, higher-end vehicles generally trounced their cheaper rivals in their percentages of year-over-year growth.

    What’s Really Happening?

    According to CNW figures, the average transaction price for vehicles has been climbing every month between January and September, ending up $1,400 higher than it was even at the start of the year. In another sign of our potential headlong flight into excess, sales of luxury cars, pickups and SUVs were up sharply in October. The improved pickups sales are also a sign that small businesses are venturing back into the market for work trucks, say analysts.

    Cadillac sales rose 15 percent nationwide in October compared to a year earlier, the company said, and General Motors has had to ramp up production to meet demand. "Our biggest problem is that we can't get enough of them," said Otto Belovich, owner of Cherry Capital Subaru and Cadillac in Traverse City, Michigan.

    Nationwide, Acura sales were up 24 percent in October, compared to the year-earlier figure. Porsche was up 28 percent and Lexus 46 percent, according to figures from AutoData Corp. and the AIADA. Audi, a perennial underperformer in the US market, was up 22 percent.

    Affluent customers have headed back into the new car market before the middle class, says Paul Taylor, chief economist for the National Automobile Dealers Association. In doing so, they have skewed sales toward more expensive cars, trucks and SUVs.

    Their return is an encouraging sign for the industry, said Cody Lusk, president of the American International Automobile Dealers Association (AIADA), a trade group representing dealers selling non-US brands. “We finally do have people with money getting off the sidelines and getting back into the market,” he said.

    The luxury market’s re-awakening may be due to a change in the mentality of better-off car buyers and their improved financial situation. “For a while, the people with disposable income decided that, for whatever reason, they were just going to sit this out," Lusk said. “There was no reason to make a purchase. But now they are saying, ‘Enough of this. I am going to finally get the car that I’ve been wanting all along.’”

    Other factors are playing a role in the luxury segment’s revival. Lusk credits the incentives that some luxury brands have been offering. “In other cases, it's a new product that they have rolled out at the right sweet spot."

    A Truck Comeback?

    Taken together, pickups and SUVs left passenger cars in the dust last month, accounting for 54 percent of the market and increasing a long-standing lead, according to J.D Power and Associates. Conventional luxury SUVs were up 15.3 percent, Taylor said. In a replay of an old game plan, General Motors scored big with its sales of SUVs and crossovers – which rose 36 percent in October, according to the Associated Press.

    Low gas prices have certainly given SUVs a lift, offering long-standing fans of the vehicles an extra incentive to buy one. Some consumers may even worry that their favorite model may one day disappear from an automaker's lineup. "Consumers may be concerned that there may be less choice in the SUV market in coming years," Taylor said.

    One sign of the concern: The average price for SUVs one to five years old has soared at dealer auctions since early 2009, climbing from about $13,000 to $22,000, according to AuctionNet, a data service for car dealerships.

    Technology Trumps All

    Consumers in all segments are showing a greater interest in expensive new technological features such as navigation, parking aids, and high-end audio, too. The options can easily boost the price of a new vehicle a few thousand dollars or more. "We are a gadget-embracing consumer society,” Lusk said. "You're also seeing that at the lowest levels of the market.”

    Even his ever-practical Subaru customers are shopping for high-tech features these days, Belovich said. So are used-car buyers. In fact, it’s often easier to sell two-year-old, fully loaded vehicle than a base version of the new model. Used Cadillac SRXs with navigation don't linger on his used car lot for very long, he said.

    What Happened To Cutting Back?

    Meanwhile, sales for Smart and Mini, arguably two pioneers of the downsizing movement, were both down last month. While the Mini was down less than 2 percent, sales of the Smart Fortwo fell 60 percent, according to AutoData Corp. and the AIADA.

    And the green car movement? Sales of the Prius, the standard-bearer of the green car movement, were down 13 percent compared to a year ago.

    But Where Are The Middle Class?

    Economist Taylor said the interest in more expensive vehicles correlates closely with a rising stock market. When relatively well-off customers see their net worth rise, they are more likely to buy a vehicle. “Stocks owned outside of retirement programs are important to luxury car buyers," he said.

    Middle-class customers don't react to a rising market in the same way, he said. Most of their net worth is tied up in their homes, and housing prices have shown little or no appreciation after steep declines. As a result, many potential car buyers have stayed away from the market.

    The U.S. auto market isn’t out of the woods yet. And despite the boom in sales of expensive vehicles, the numbers don’t necessarily suggest that consumers are going back to their old gas-guzzling ways, according to Lusk. The trend will be clearer when middle-class customers stop sitting on the sidelines and re-enter the market.

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    1 - 20 of 35 Comments
    walnutshire95 Nov 11, 2010 7:13 AM
    @ sutja ! You might have to go buy a horse from an inbred cousin. MOST cars and trucks are UNION MADE. Especially IMPORTS made in their country of origin. Only products made in the southern USA are made by non-union workers. Much to the dismay of the UNION's in their countries of origin.
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    djtonydee Nov 11, 2010 7:08 AM
    CADILAC IS ONCE AGAIN MAKING GREAT CARS. AND CAN COMPETE ANB OUT PERFORM ANYONE...AND I MEAM ANYONE! ...GO CTSv I AM A PROUD AMERICAN AND I WILL BUY AN AMERICAN CAR...PERIOD
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    speshalkay1 Nov 11, 2010 6:20 AM
    you mean the rich are getting richer while the rest of us get screwed? gee, who knew?
    Report This
    bd189 Nov 11, 2010 5:24 AM
    i've said it before and i'll say it again, IT DOESN'T MATTER WHAT MAKE YOU BUY IF YOU'RE 'CAR STUPID' ALL BRANDS WILL FAIL ON YOU AND COST YOUR SAVINGS TO FIX. the easiest way to tell if somebody is 'car stupid' walk up to them after they park and say 'your muffler bearings sound bad you should get that checked' . if they respond with serious concern they are a DUNCE when it comes to cars and will always get ripped off at the mechanic and at the sales desk whether it be toyota, chevy, bmw or jeep.
    Report This
    amosesjr Nov 11, 2010 5:08 AM
    It's ZERO percent financing! DUH
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    amhsvvprn Nov 11, 2010 4:55 AM
    Yep here we go again.....we as Americans forget so easy................If I was in the mind to buy a car it would a Ford, they were the only that did not go to th Goverment with they hand out for money.........
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    sdfdssg87 Nov 11, 2010 4:30 AM
    Well...Consumers not buying with ''OWN'' money is just use ''CREDIT'' like usual...well this is not ''REAL'' Economy and spending...last time USA have a real Economy and spending is around 1960-ix...all after that is just a credit...loans...and similar stuff which is not pay off much of that and Consumers missing payments all over for many things and proff of that is around 1960-ix we have a little personal debt and now personal debt is around $2,4 Trillion not inculded house market...way to go...weay to go...heheheh....
    Report This
    hachd07 Nov 11, 2010 2:42 AM
    Hey Old school musclue car builder ,I am ben see the muscle of the60's.Cadilatics ere always the Best riding cars on the GM line,diught that!!! All the horsepower I.ve owned from 60's GTO's to pontiac fromula 455's to my price my 73 Vega with a 400 small-block chevy,burn the tires around the block. Now has a hi-prf. motor to face up with evryone,lotus,corvettee in a smaller case,etcoh bwn,too. That are all SURE hi-po running cars fromgermany.I stay stay with 1 of the bestCUT cad and ,ride one ,than say uou u Hate it,DA..Get real...............Rodder duane,K.c.Ks.. ran drad cars for yrs.I know a car wirh portention,period.........
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    lucass980 Nov 11, 2010 1:58 AM
    LOL people call GM names and take shots at them... YET GM is investing their money from sales BACK INTO the government. The Government is not ONLY getting their money BACK from GM they are also making money from the Interest TOO. Funny how you dont hear people make fun of Chrysler and FORD. Yes I said FORD. People seem to lose their memory when FORD RECEIVED OVER $50 BILLION DOLLARS IN "LOANS" from the Bush Administration. Which they have yet to repay a DIME! Also ford is MORTGAGED up to their EYEBALLS by taking loans from FOREIGN BANKS. So when they do repay portions of their loans to the FOREIGN banks that money is going OVERSEAS.. GM is selling stocks again so that they can REPAY the balance of their loan.. WOW PEOPLE GROW UP! STOP FOLLOWING IGNORANT RANTS that uneducated bloggers post about GM. So once they repay their loan what will you talk about then?? Their quality is higher now than its EVER been. thats how they can issue 100K MILE WARRANTIES. If they build BAD cars they wouldnt be able to do it. Say what you wish about them but my next vehicle WILL be ANOTHER GREAT GM PRODUCT.
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    jaxn192003 Nov 11, 2010 1:58 AM
    HAPPY GM TRUCK OWNER HERE!!! DO WISH THEY COULD BE OUT ON THEIR OWN AGAIN THO...YOU HAVE TO ADMIT THEY DO MAKE SOME BADASS TRUCKS, SUVS, CAMARO'S, & CORVETTE IS BY FAR THE BEST VALUE IN THE SUPER CAR MARKET. I ALSO LOVE DODGE. THEY NEED TO JUST KEEP THEIR TRUCKS, THE CHARGER, CHALLENGER, KEEP JEEPS AND DUMP THE REST OF THERE CARS. FORD I PERSONALLY DO NOT LIKE. THERE COMPANY MIGHT BE SOMEWHAT HEALTHY BUT THEIR DESIGNS ARE STRAIT UP UGLY...ESPECIALLY THE NEW SUPER DUTY...THAT GRILLE NEEDS TO GO...HOW MANY TIMES ARE THEY GOING TO CHANGE THEIR DIESELS ENGINES BY THE WAY...WOW BECAUSE THEY SUCK MAYBE! OH YEAH AND WHY DO GM'S ENGINES ALWAYS PERFORM BETTER THAN FORDS EVEN WHEN FORDS ENGINES ARE BIGGER IN SIZE. ALWAYS BEHIND FORD. WHY DO PEOPLE BUY THAT TRASH. HAD A RANGER, F-150, F-250 SUPER DUTY...ALL TRASH...PROBLEMS...PROBLEMS... & MORE PROBLEMS...NEVER AGAIN...I ADMIT THINGS NEED TO CHANGE...NO MORE BAIL-OUT OR HANDOUTS...IM A BUSINESS OWNER AND I DON'T EXPECT ANYONE BAILING ME OUT WHEN I CAN TAKE CAR OF MYSELF. FEAST AND FAMINE...IT HAPPENS YOU JUST NEED TO RETHINK AND REBUILD. GO GM REBUILD AND GET YOUR ASS BACK ON YOUR OWN MAKING CARS WE LOVE!
    Report This
    croshatch Nov 11, 2010 1:54 AM
    Wow... such ignorance here. I bought a 2010 Malibu and it's a #$%@ing GREAT car for the price. To those who complain about GM getting "bought out" by U.S. taxpayers, why wouldn't you buy from a company that YOU OWN??? Put money in your OWN pocket! Check out the American ************* much better than you think.
    Report This
    dahopeboston Nov 11, 2010 1:07 AM
    YEAH...G.M. SHOULD BE SMILING...ACTUALLY, LAUGHING THEIR ASSES OFF AFTER THE ****-KICKIN THE STOCK HOLDERS TOOK A YEAR AGO. WHY WOULD ANYONE IN THEIR RIGHT MIND BUY G.M. STOCK ?!
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    htcorner23 Nov 11, 2010 12:16 AM
    Statistically, I have another 50 years or so on this earth. I'll probably buy quite a few cars in that time, but there's not a chance in HELL that one will be a GM vehicle. I do NOT do business with companies that are owned by FASCISTS, managed by MORONS, and whose cars are built by THUGS. Does that pretty much cover it?
    Report This
    gcruz14457 Nov 11, 2010 12:09 AM
    I think of all the vehicles, the number one is a Cadillac hands down. I own a 1984 El dorodo, that I want to restore. At this time we have big money problems. My husband is disabled and this week he had a heart attack. His heart will only be working at 20 % for the rest of his life. I am very ill and do not work, because I have a severe case of Fibromyalgia which attacks all my muscles, tendons, and nerves through out my whole body. I am in pain 24/7. We are senior citizens and we would love to own a Catillac Escalade. This will not happen in our life time.I purchased my El Dorodo, brand new off the floor. It was a beauty. The car had all the toys. It has the big grill in the front of the car, it also has the most expenive rims and the nine hundred dollar tires , that is each tire. It has a great sound system with bose speakers. I fell in love with this car and I feel the same way today. Oh and by the way no vehicles has that smooth ride like .your on a cloud and so quiet running on a bumpy ride. I hope I live long enough to restore her to the beauty i she was. To the persons out there that ripped all the cadillac signs and crushed the back bumber, I want to let other people what kind of the people you are just LOW LIFE !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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    valleylook Nov 10, 2010 11:06 PM
    GM builds great cars but the dealers SUCK and destroy them
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    jamesccollins Nov 10, 2010 11:04 PM
    Will the rich be able to save the US economy?
    Report This
    reitredge76 Nov 10, 2010 10:49 PM
    GM is **************** Government Motors now. People dont want GM cars anymore. Theyre lousy cars. They want Toyotas, Hondas, Hyundais, Subarus, Nissans. Anything but a Chevy. If Toyota hadnt done it, then Honda or Hyundai would have put GM out of its misery. Do you think Uncle Sam knows how to run a car company? I doubt it. GM management had its head in the sand for forty years. Its a wonder GM lasted as long as it did. GM was bound to become a form of Government welfare.
    Report This
    sutja Nov 10, 2010 10:35 PM
    People should do thier homework and NOT buy union made products.
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    odonnel28 Nov 10, 2010 10:25 PM
    I monitor the used car market for a living, read all the monthly car magazines, and am on the car lots talking with the salesmen in the trenches. Cadillacs are selling because of the styling of their new products and GM is keying its advertising to younger consumers. Seen the 2011 CTS Coupe? It is stunning! Audi's sales are up because they have introduced new cars and tastefully re-styled the autos in their existing line. Lexus is up simply because people always buy quality when they are spending wisely. The Smart fell 60% because "cute" wears off quickly and the car's fuel mileage figures are not that great.
    Report This
    ejayeff Nov 10, 2010 10:09 PM
    Rich people always stay rich this is no different when times are good, during a depression or recession, poor people get hurt, thats it. Rich people will always buy their big cars.
    Report This
    1 - 20 of 35 Comments
     
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