Sept. luxury sales serve as auto market barometer

NEW YORK — Luxury car sales could offer the most accurate snapshot of a U.S. auto market that languished in September due to fallout from the government’s Cash for Clunkers program.

Automakers are expected to report a steep drop U.S. sales for the month on Thursday, but making sense of underlying demand won’t be simple. That’s because the big discounts offered under this summer’s clunkers program drew in shoppers who may have bought cars in September. It also depleted showrooms, leaving fewer choices for customers, and prompted many automakers to reduce incentives.

But according to industry analysts, luxury car sales were relatively unaffected by the clunkers incentives, which attracted shoppers to middle-of-the-road nameplates such as Toyota, Chevrolet and Ford.

Cash for Clunkers — which spurred sales of nearly 700,000 vehicles during July and August — capped the price of eligible new cars at $45,000. That ruled out most luxury vehicles, many of whose price tags run well over that amount. The 22,000 Ford Focuses sold through clunkers outnumbered all the vehicles sold by Lexus, BMW, Mercedes and Acura combined, according to figures provided by the Department of Transportation.

“They didn’t get invited to the clunker party,” said Jeremy Anwyl, CEO of the auto Web site Edmunds.com.

As a result, the high-end brands should be a good indicator of whether sales will continue a modest recovery that began last summer, some analysts said.

Luxury sales tanked when the financial meltdown began a year ago, dropping more than 25 percent to 78,795 from August to September of 2008, according to AutoData. They bottomed in January of 2009 at 54,934 and have yet to recover to early 2008 levels.

Jesse Toprak, chief analyst for the car pricing Web site TrueCar.com, said many luxury purchases follow broader macroeconomic trends, like the stock market — and the Dow Jones industrials are up more than 3 percent in September. So any increase in luxury car spending could be a sign of recovery in the broader auto market, he said.

Toprak predicted that the luxury market could show strength in September because of increased personal wealth and because European brands like BMW, Audi and Mercedes have been offering more attractive lease deals and have more incentives available.

Still, September’s sales — expected at an annualized rate of 9 million to 10 million — will be a long fall from the heady days of August, when carmakers reported annualized sales of 14.1 million. That was the best month all year and the first year-over-year monthly sales increase since 2007.

Most industry watchers expect sales to continue climbing slowly for the remainder of the year as automakers replenish inventory and the economy rebounds.

“We see bounceback but it will be at a gradual pace,” said Jeff Schuster, executive director of global forecasting at J.D. Power & Associates. “The factories did get turned back on … and continued positive signals are coming out of the economy — that’s key.”

Domestic automakers could see their market share ground down to record-low levels in September, Toprak said. Clunkers brought out a lot of domestic buyers, leaving luxury buyers as the big segment remaining in the marketplace. That will be to the advantage of European and Japanese brands, who control a bigger piece of the luxury market.

AP Auto Writer Tom Krisher contributed from Detroit and Associated Press Writers Stephen Manning and Ken Thomas contributed from Washington.