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CNN Live At Daybreak

Redefining Luxury Cars

Aired April 03, 2002 - 06:44   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Let's talk about luxury cars now because, you know, everybody wants one.

CHAD MYERS, CNN METEOROLOGIST: Yes.

COSTELLO: And it used to be just a luxury that the rich could afford, but no more.

MYERS: Not really. I mean the luxury car market, the prices have come down significantly and a new definition of luxury and the -- obviously the expanding economy changing the way America drives.

Susan Lisovicz has the story.

(BEGIN VIDEOTAPE)

SUSAN LISOVICZ, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): If you're in the market for a new luxury vehicle, don't ask your dealer about incentives.

MICHAEL LAZARUS, NEW YORK AUTO DEALER: We don't call them incentives, we call them programs. But there are many programs that are out there to drive the traffic, and they were more or less quite successful.

LISOVICZ: Luxury car manufacturers are moving nearly twice the number of vehicles sold just 10 years ago.

MICHAEL WARD, AUTO ANALYST, SALOMON SMITH BARNEY: We've seen a huge expansion in so-called luxury vehicles over the last 10 years from about 1.2 million units up over 2 million units. But I think it's just continuing to -- the race is just beginning to be run. And I think it's going to continue to accelerate over the next four to five years as the baby boomers get into their peak luxury buying years and also their peak earning years.

LISOVICZ: But luxury carmakers are not only selling to baby boomers, they're shaping their products and their pricing plans to fit a broad range of lifestyles and budgets.

WARD: You see a lot of the luxury manufacturers, Mercedes is the recent one, to offer I think the sticker price is roughly starting at $25,000 for a luxury vehicle. Obviously you run the risk that you dilute your brand. LISOVICZ: Mercedes is willing to risk offering a lower priced luxury vehicle hoping to gain market share. It's also expanding at the high end, having just unveiled the $200,000 plus Maybach sedan.

PAUL HALATA, MERCEDES-BENZ USA: It demonstrates, again, the flexibility and agility of our company, that we can demonstrate to bring something at the top end and bring it into the lower end of the luxury car segment. It shows a company that is at the forefront whichever way you look at it.

LISOVICZ: So with the expanding definition of a luxury vehicle, what is it that buyers are looking for?

LAZARUS: I think they're looking for everything now. They're looking for all-wheel drive, front-wheel drive, turbo charges, price, but mostly cachet.

LISOVICZ: And luxury manufacturers are happy to accommodate them.

Susan Lisovicz, CNN Financial News, New York.

(END VIDEOTAPE)

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