Automotive "Downscaling" Reveals The Importance of Being Frugal. Or Not.

Automotive News [sub] offers-up the not-so-startling fact that luxury car buyers are trading down. “Downscaling.” Common sense suggests the number one reason not to buy a high-priced luxury car: the buyer can’t afford it. As any good car salesman will tell you, “afford” is an entirely subjective, infinitely malleable term. Hence the term “consumer confidence” as a measurement of whether or not people think they can afford something. You know; even if they can’t, really. And while you’re contemplating what all that means for the American economy, how about this: the “Power Information Network” (J.D.’s mob) reckons the move down the automotive food chain is a reflection of buyers’ psychological need to NOT impress the neighbors. “Especially in this recessionary period, neighbors may not want to show up one another as ‘For Sale’ signs go up everywhere,” [PIN general manager Geoff] Broderick said.” I call bullshit. Since when do Americans tailor their consumption patterns out of sensitivity to their neighbors’ financial distress? The whole stealth wealth thing is a myth. A California Mercedes dealer disagrees . . .

George Grinzewitsch Jr. owns three Mercedes stores in Sacramento and is a partner in one in Reno, Nev. Grinzewitsch, Haines’ dealer, is beginning to see signs of a recovery, but he is cautious.

“Conspicuous consumption is definitely verboten right now, he said. “I’m seeing lots of trades of S class for E class, or a certified pre-owned from someone who would normally buy new.”

AN assembles a chorus of experts to affirm the article’s central thesis: nouveau riche has suddenly become unacceptably gauche.

Flagrant opulence is on the way out, said Lincoln Merrihew, an analyst with Compete’s automotive consultancy in Boston. “I expect folks would be proud to show neighbors they went new — as long as they traded down in size,” he said . . .

Scott Keogh, Audi of America’s chief marketing officer, is playing on the trend to show Audi as a savvy luxury choice compared to its rivals.

That’s one reason he thinks Audi’s sales are off just 10 percent so far this year, compared with the luxury segment’s decline of about 29 percent.

“There is affluence, and consumers have means, but frivolousness has gone away,” Keogh said. “We’re seeing movement away from the old-world luxury of focusing on the badge and flaunting what you have.”

Badge snobbery is out? Sure, just as soon as the manufacturers manage to change human nature. Meanwhile, did I just hear the E-Class product manager wince?

So, how does eight-time Mercedes owner Haines feel about driving a lesser vehicle?

“I was comfortable moving down,” he said. “The car I had was really, really, really nice, and the car I have now is just really nice. But I don’t know if I’ll move back to the big one.”