Luxury Cars Suffer in the Recession

The recession has taken its toll on the British car industry, and one of the most hit sectors is the luxury car market. It simply isn't seen to be fashionable to be indulging in a luxury car at the moment. Another factor is the desire for motorists to switch the lower carbon emission vehicles, which luxury models traditionally are not.

Bentley has seen sales fall by up to 50% this year after a record year in 2007. The 3,400 workers at their Crewe factory have had to take a ten percent pay cut until the end of the year in order to save their jobs. It takes 400 hours to hand-build each Bentley Mulsanne - the company's new flagship model.

Jaguar Land Rover has been bailed out by 175 million pound of private funding, secured by parent company, Tata Motors. The company was in line for an 800 million pound payout from the UK Government before the funding was secured. 2,500 jobs have already gone at the company, and it is feared that more may have to go to ensure the company's survival. Sales dropped 23% between April and June compared to last year, with only 10,700 cars being sold.

Luxury car dealers have not really benefited from the scrappage scheme either. The scheme, designed to boost new car sales by offering motorists 2000 pounds off the price of a new car when trading in a 10 year old model, has been a great boost to small carmakers, including Ford, Renault and Fiat. The idea of saving 2000 pounds off the price of an 8000 pounds car is quite appealing, but if you can afford to buy a 30000 pound car, the 2000 pound saving is probably not what attracted you.

In July, the industry reported its first rise in car sales in 15 months, and the scrappage scheme has no doubt helped moved things along. Unfortunately, the best sellers list does not contain luxury makes such as Lexus and Land Rover. Dorset, Devon and Somerset car dealers have seen some of the highest enthusiasm for the scheme, with 11% of scrappage sales being registered in south west England. Ford has secured most of the scrappage sales, closely followed by Hyundai and Toyota.

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