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For Luxury Automakers, It Actually Is December to Remember

For Luxury Automakers, It Actually Is December to Remember
  • luxury automakers are increasingly offering incentives in the month of december, using a variety of marketing tactics involving snow, family, and holiday imagery.
  • many of the incentives go through january 2 and include leasing and financing deals.
  • it's not just holiday spirit; automakers do considerably better in the last month of the year than in the two months prior.

    do people actually buy high-end vehicles as christmas gifts? whether that's the reason for the purchase or not, luxury automakers—bmw, audi, land rover, lexus, and others—have increasingly made it a year-end tradition to roll out deals and incentives in december, and it's a tactic that has contributed to increased sales.

    by this point in the season, you've probably seen so many of their holiday-themed car ads that they're all starting to run together. they may have interesting euphemisms for "year-end markdowns" like "december to remember" and "season of adventure," but they're essentially incentivized deals on sales, leasing, and financing. and some of them, beyond the oversize bows and the snowflake imagery, actually can bring down the cost of a new vehicle by thousands of dollars.

    sometimes they're intended just to clear out the previous model year's inventory by new year's eve, such as in the case of the 2019 ford fusion sale announced this week that cuts the mid-size sedan's price by 20 percent. many luxury brands have incentives on both 2019 and 2020 model year vehicles, with the best deals coming on prior-year new cars. for instance, bmw currently has an offer of up to $4500 on select vehicles, and infiniti is offering up $4000 credit on certain models. even aston martin is getting in on the game with a "joyful and triumphant" sale, advertising a no-money-down lease on the vantage with payments of $1699 a month. automakers' advertised incentives frequently include both leasing and financing deals, most of which end on january 2.

    our calculations in the chart above, using automotive news sales data from 2015 through 2018, show just how much december sales stand out for these automakers and others in comparison with the average sales of the two preceding months, october and november. over those four years, lexus has averaged nearly 47 percent higher sales in december when compared to the average from the months prior. lexus's japanese luxury competitor, infiniti, has sold nearly 42 percent more vehicles in december.

    eight of the 10 top-performing companies in our analysis of december sales are luxury brands. gmc and mazda were the two exceptions, with gmc selling almost 35 percent more vehicles in december. (we excluded manufacturers with fewer than 1000 sales in any of the three months examined over the past four years.)

    obviously, it's not just incentives that drive up december sales, but they play a role in the overall increase in sales relative to the rest of the fourth quarter of the year.

    so, if you’re going to take advantage of any of the ongoing deals or incentives, don’t wait too long – but be sure to read up before you head out into the wild west of dealerships.

    source:caranddriver.com