Fresno luxury auto dealers all over $30K price point

Source: The Business Journal
Written by Clay Moffitt

Even if momentarily, German luxury automotive manufacturer Mercedes-Benz was able to draw the attention away from the drama unfolding on the gridiron with its Super Bowl ad introducing its new CLA model and its price tag starting at $29,999. Mercedes is the latest in a line of luxury car manufacturers trying to tap into the younger working professionals’ market with a price point in the $30,000-35,000 range. Traditionally, luxury car buyers are more experienced and settled within their careers. But with the baby-boomers creeping up in age, manufacturers have taken note of the uncomfortable reality of a generation of that size getting older. “An aging demographic is very scary to a brand,” confirmed Caren Myers, general manager of Fresno Lexus. Lexus, Mercedes, BMW, Volvo, Audi and Cadillac are among the manufacturers who have or will soon release models ranging near that $30,000 price point to bring down the average age of their consumer base. “It’s a way to get that 25 to 30-year-old customer in the door, and as they move on and grow in their career, they will get into other models,” said Yrma Rico with Weber BMW. The Mercedes-Benz CLA won’t be on sales lots until late summer or early fall. Scott Biehl, the owner, dealer and operator of Mercedes-Benz of Fresno, doesn’t expect the model to be limited to just 30-something consumers. “The CLA will appeal to the younger buyer but it will also appeal to anyone that wants the safety and luxury of a Mercedes-Benz at that price point,” Biehl said. Rico takes a unique view that the other luxury car companies are not only trying to capture a younger demographic, but “they’re going after the BMW buyer.” According to Rico, BMW’s sporty design and high performance vehicles have always helped the company capture a younger consumer base than the other luxury manufacturers. However, the competition isn’t forcing Rico to panic. “It’s always good to have a little competition,” Rico said. “The consumer will demand the manufacturer to produce better product for less money.” BMW offers its 1 series, starting at $32,095, to compete in the group. During the downturn in the economy, luxury dealerships lost a lot of entry-level buyers as they turned to purchasing less luxurious makes. “We are trying to lure them back,” Myers said. “We want that younger, more youthful buyer. We’ve changed the design of cars and made other changes to appeal to this age group.” Lexus has embraced the new price point with its own niche. Of all the luxury vehicles in the $30,000-35,000 range, the Lexus CT is the only hybrid of the group, capitalizing on the more environmentally conscious mindset of the younger buyers. “Today’s children are being exposed to all of the important parts of environment. I definitely think there will be a trend there,” Myers said. Myers says the age of the buyers of the CT range from fresh out of college to 60 years old and older. Last year Fresno Lexus sold 41 CTs, which accounted for approximately 7 percent of the dealership’s new car sales for the year. Biehl expects his dealership to sell more used Mercedes vehicles because customers will come with a $30,000 price tag in mind, but not necessarily with their heart set on the CLA. “They’ll decide if they want a CLA or they may want a certified pre-owned Mercedes,” Biehl said. Although the dealerships anticipate increased sales by the lower-priced entry-level models, they will not generate large profits directly by each $30,000 car sold. The profit margins will come from the parts and service that go along with each vehicle, in addition to the buyer loyalty expected by introducing their brands at a younger age.

URL to original article: http://www.thebusinessjournal.com/news/retail/5007-fresno-luxury-auto-dealers-all-over-30k-price-point

For further information on Fresno Real Estate check: http://www.londonproperties.com