IE 11 is not supported. For an optimal experience visit our site on another browser.

Automakers offering high-end holiday gifts

With financial markets posting record gains in recent months, luxury vehicle manufacturers are hoping that executives will be driven to spend their year-end bonuses on new cars for themselves and their loved ones.
Automakers hope executives will spend their year-end bonuses on luxury cars like the Mercedes-Benz 2007 CL600 flagship coupe, offered through Saks’ holiday catalog for a cool $160,000.Mercedes-Benz
/ Source: The Associated Press

For the corporate executive with some extra holiday cash to spend, Rolls-Royce Motor Cars is offering a limited-edition Phantom exclusively at its Beverly Hills dealership.

The vehicles, of which only six were made, feature mother of pearl inlays, commemorative plaques, chrome 21-inch wheels and a lounge seat DVD system, all for a mere $370,000 each.

Too pricey? Mercedes Benz created the Signature Edition CL600 luxury coupe, which it offered exclusively through Saks Fifth Avenue’s holiday catalog for $160,000 each.

All 20 of the CL600s sold in less than eight minutes on Nov. 14. As of Friday, just three of the six special-edition Phantoms remained.

With financial markets posting record gains in recent months, luxury vehicle manufacturers are hoping that executives will be driven to spend their year-end bonuses on new cars for themselves and their loved ones. At the same time, some automakers have kicked their TV ad campaigns into high gear and boosted their incentive offers, in hopes of drawing shoppers to dealerships.

“We are in a unique position with the stock market being so strong this year,” said Chris Marchand, western regional manager for Rolls-Royce.

“We think it’s a great opportunity with the Beverly Hills edition, and with Rolls-Royce in general, to get people in the dealerships and in a Rolls-Royce. We want to be the luxury vehicle of choice for the people who have the disposable income to spend on something like this.”

One of the special edition Phantoms went to oil and gas exploration executive Hal Taines, who bought it as a present for his wife.

Taines, who owns three other vehicles and bought his first Rolls-Royce in 1971, said he kept stopping by the Beverly Hills dealership to check out the special edition Phantom. He said he was intimidated at first by its large size, but loved the look of the vehicle.

“The hook was when I got in to drive the car,” Taines said. “I couldn’t believe. It drove like any car I’ve ever owned except it has the Rolls-Royce luxury and ride. It was just like riding on glass or on ice. And it does everything but brush your teeth. I wrote a check.”

Taines has only owned the car for about a week, but said he had put 239 miles on the odometer by Saturday. His wife hasn’t gotten a chance to drive it yet.

While it’s difficult tell how many Rolls-Royces sold during the holiday season are for gifts, Marchand said that December sales generally account for about 15 percent to 20 percent of a year’s total sales, compared with 8 percent to 10 percent for each other month.

Paul Taylor, chief economist for the National Automobile Dealers Association, said demand for luxury vehicles this time of year isn’t limited to Rolls-Royces.

“Certainly, the purchase of cars as gifts been a growing phenomenon in recent years,” Taylor said.

In addition, studies have found a direct correlation between the performance of the stock market and sales of luxury cars, potentially making this year’s holiday season a strong one, Taylor said.

“Our inventory numbers indicate a very strong selection of new cars, so the key factor this year is for those dealerships to have a lot of those red, white and green bows in stock, because that can be a deal-killer if customers want the car and a big bow,” he added jokingly.

Holiday-themed ad campaigns are also key to boosting an automaker’s sales in December, helping them clear dealers’ lots and post a few more sales before the end of the fiscal year.

Arguably, the automaker best known for its holiday ad blitz is Toyota Motor Corp.’s Lexus division, which each year floods the airwaves with images of shiny new cars decorated with big bows, Taylor said.

Greg Thome, a spokesman for Lexus, said the company started its “December to Remember” holiday ad campaign in 1995 and added the trademark bows in 1998.

“People almost expect to see the ads every year, from an annual television standpoint,” Thome said. “Just like the Coca-Cola polar bears, they expect to see the Lexus ads as well.”

Thome said the annual ad campaign, coupled with some of the company’s steepest sales incentives of the year, are in response to an increased demand for the company’s vehicles during the holiday season.

Although it’s not possible to quantify the effect of the ad campaign on Lexus sales, Thome said December sales have beat company projections for the past six years.

Customer service also plays a role, he said. Just like in the commercials, Lexus dealerships will deliver a car to the receiving person’s house, complete with a big bow on top, Thome said.

While some people do chose to buy vehicles as gifts, or to take advantage of certain end-of-the-year tax benefits, many less affluent shoppers end up deciding to postpone their purchases until January, or even spring, said Jack Nerad, executive market analyst for Kelley Blue Book.

“Generally, December is not a good month for typical car dealers,” Nerad said. “People are spending their money on other things and realizing how poor they are.

“Auto manufacturers take two different paths in December. Some will add incentives to boost sales and others will simply sit the month out,” he added.

As for Taines, he thinks luxury cars may have replaced diamonds when it comes to luxury gift-giving.

“You want to give somebody very special something very special just for them and a Rolls-Royce is just that,” he said.