Luxury Car Sales Downshift to First Gear

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"We are hearing that people are being cautious," Dowding says. "Property values, the scale and growth of financial portfolios—all that has made people cautious. The repeat purchaser could be saying, 'Maybe I'll wait.' In some instances, we feel people are afraid of creating the wrong impression in terms of extravagance and so on."

Upturn at Rolls

That doesn't seem to be inhibiting Rolls-Royce buyers. Rolls-Royce's U.S. sales are up an estimated 48.8%, according to AutoData. Just as Bentley did over the past few years, though, Rolls-Royce is adding a series of all-new models.

"It's not really a straightforward comparison, because we're in the middle of adding models," says Paul Ferraiolo, president of Rolls-Royce Motor Cars North America, a division of BMW based in Woodcliff Lake, N.J. "We have definitely seen some of our clients suffer in this economy. I would never make a broad statement that our clients are immune to what's going on, or not sensitive to the plight of others. We are up, and up significantly, because people are very loyal to the ownership experience, and we have a very high repurchase rate,"

Even in a soft economy, exclusivity is an important part of the allure of extreme high-end brands, says Marti Eulberg, president and CEO of Maserati North America in Englewood Cliffs, N.J. She says showroom traffic is down for Maserati's 56 U.S. dealers, but sales are up, and there's a waiting list for new models. "I won't say we're seeing as many people [coming in] as we've seen historically, but what's happening is, customers are coming in because of the exclusivity. We're providing something they can't get from, for lack of a better term, 'mass-luxury' manufacturers."

Exotic Brands

Lamborghini and Ferrari also report waiting lists at their U.S. dealerships, even though AutoData figures indicate their U.S. sales are down slightly. Sales volumes are so low for those exotic brands that a single shipment of cars from one month to the next can make a significant percentage difference in their sales. Sales for Lamborghini and Ferrari are up worldwide. Spokesmen for both companies say separately they expect to finish 2008 with sales at least even with 2007's.

Sales vary so much by region in the U.S. market that it's hard to generalize, says Lamborghini CEO Stephan Winkelmann. "Let's say that the U.S. is huge, so that in different markets, there are different realities all over the place. States such as Texas are very strong and don't seem to have problems. Others are more affected by real estate, such as California. Overall, it's not something that's bothering us so far, because we are getting a [sales] level that is good and reasonable."

Mitch Katz, CEO of Premier Financial Services in Woodbury, Conn., says his business is up. Premier leases new and used exotic cars, including some vintage collector cars. "Our business is a little bit ahead of last year, which we find surprising in this market."

Betting on Vintage Appeal

A couple of wealthy entrepreneurs, William McMichael and Ari Straus, have placed a big bet that demand will stay strong at the extreme high end. With their partners, they recently built Monticello Motor Club at a former municipal airport in Monticello, N.Y., about two hours north of Manhattan, with a helicopter pad and a 4.1-mile race track, for members to race their exotic and vintage cars.

If all the phases are built as planned, including trackside condominiums, the total project could be worth $50 million, McMichael says. The group initially set the initiation fee at $100,000 for 500 members—and got so much interest, they raised it to $125,000 almost immediately. "There's no question there are 500 people who have the means and the desire," says Straus.

Notwithstanding what the car companies say, at least a few people don't seem to feel a short-term market downturn, says Katz at Premier Financial Services. "There are those who just are not affected," he says. "They've been in a good financial position for many years, and they are able to continue to buy. Others are being very cautious."

High demand in Asia, especially in China, is taking some of the pressure off U.S. sales for the ultraluxury brands. That helps Bentley and other manufacturers and dealers manage a "customer-pull" system, in which products are always in short supply, as opposed to a "push" system, in which too many cars are chasing too few buyers.

"It wasn't that long ago that the U.S. was 60% of our global sales," says Bentley's Dowding. "Now it's in the region of 40%. The world market is definitely rebalancing slightly."

Click here to see a lineup of high-end cars that could get crossed off many millionaires' shopping list if the economy continues to struggle.

Henry is a reporter covering the automotive industry and automotive trends in BusinessWeek's New York office.