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Luxury car brands scrambling to avoid a blue Christmas

DETROIT — When financial markets surge to new records, sales of luxury cars usually rise, too. Instead, October U.S. auto sales reports on Wednesday showed that a collapse in sales of luxury sedans is accelerating. Consumers have gradually shifted over to luxury sport utility vehicles from sedans in the past decade, but the trend — which has occurred in both the non-luxury and luxury sedan segments of the auto market — was particularly pronounced in October. Sales of Daimler AG's Mercedes-Benz S-Class, long a global benchmark for large, premium sedans, plunged 49 percent in October, and are down 24.8 percent for the year to date. General Motors' Cadillac brand said it sold just 779 of its CTS sedans in October. Demand for that car, designed to compete with German luxury sedans, is down nearly 33 percent for the year. "There's still a significant portion of the market that wants a car, but I'm sure there were people who preferred a horse to a car at one point." Cadillac's best-selling model this year is the XT5 compact SUV, which has more than doubled sales from a year ago. The shift within the luxury vehicle market away from sedans toward SUVs of all sizes is forcing some of the most prestigious brands to scramble to add SUV models to their lineups or boost SUV production to meet demand. "In the short term, there will be pressure to add (consumer) incentives, cut production or both," said Cox Automotive analyst Michelle Krebs. "And we just don't see an end in sight to this trend." The Dow Jones Industrial Average has been trading at all-time highs, usually a good sign for luxury sedans, but as major automakers reported new U.S. vehicle sales for October on Wednesday, sales for passenger cars continued their slide while luxury SUV and crossover sales rose again. According to Kelley Blue Book data, in 2007 luxury sedans made up 7.6 percent of U.S. new vehicle sales, while luxury SUVs made up 4.2 percent. Through September this year, luxury SUVs made up just over 7 percent of the market, compared with 4.9 percent for luxury sedans. In the short term, luxury brands could use holiday season sales promotions to clear slow-selling sedans off dealer lots, analysts said. Toyota's Lexus brand said on Wednesday it will launch its "December to Remember" year-end sales promotion for the 18th straight year.

Lexus to offer no-haggle policy at dealers

The automotive world hasn't seen no-haggle pricing in the US since Saturn collapsed in 2009, but Lexus is about to bring it back. The idea originated in company discussions with dealers two years ago, with dealers saying that a segment of potential buyers didn't enjoy negotiating a price. In order to find out how firm pricing will alter the landscape, 12 Lexus dealers will begin the pilot project at the beginning of 2016. That means new and used cars, parts, and service will come with fixed prices, according to the Detroit Free Press. Jeff Bracken, general manager of the Lexus brand, held up a Phoenix Toyota dealer as a success story, noting that the dealer's no-haggle strategy has worked for 12 years. Outside consultants will train employees at the selected outlets, and its effectiveness will be examined nearly every week. Prices can be changed, "but the expectation is that they remain unchanged for months at a time," and any incentives can still be deducted from that set price. The key to getting usable results - whether the program sticks around or not - is that those 12 dealers have to accept that some customers are going to walk out the door if they can't get the deal they want. Bracken said he expects sales and market share to decline some once the project begins, but only for a few months. After customers get accustomed to it, Bracken said he expects the initiative to be a success and expand to other company dealerships in 2017, even if not all Lexus dealers sign on. Related Video: News Source: Detroit Free PressImage Credit: Mike Windle/Getty Images for Pandora Media, Inc. Lexus Car Buying Car Dealers Used Car Buying Luxury

Lexus ROV concept is a hydrogen-powered luxury side-by-side

Side-by-sides come in all shapes and sizes, but we've never seen one like the Lexus ROV concept. For one, it's a Lexus; the firm is not a big player in the side-by-side segment. It's as luxurious as the badge on its nose suggests, and it's powered by a hydrogen-burning engine. Lexus explained that the ROV (an acronym that stands for Recreational Off-highway Vehicle) is its "response to the growing passion for the outdoors and adventurous spirit of luxury consumers." It also illustrates the brand's wish to design lifestyle-oriented products, and it showcases the engineering department's research into new technologies. The ROV stretches 322 inches long, 68 inches wide and 71 inches wide. And, while it doesn't wear a giant spindle grille, it falls in line with the Lexus design language thanks to angular body panels. Inside, the ROV offers a pair of seats with harnesses and suspension elements to filter out bumps, carbon fiber accents and a relatively simple instrument cluster with an analog tachometer and a digital display. Lexus notes that the "Tazuna" approach to interior design that has shaped most of its recent concept cars permeated the ROV, meaning the cabin is human-centric. Interestingly, it also points out that the ROV meets the same quietness, durability, and reliability standards as the regular-production cars it sells, which is no small feat. Power comes from a direct-injected 1.0-liter engine that burns compressed hydrogen stored in a tank. Lexus didn't publish technical details so we don't know how much horsepower or torque the engine makes. Its cylinder count wasn't even published, though zooming in on the exhaust manifold confirms that it's a three-cylinder. It's likely not a coincidence that parent company Toyota tested a hydrogen-powered Corolla race car powered by a 1.0-liter hydrogen-burning triple earlier in 2021. That engine was turbocharged, however; this one is not. Looking at the center console reveals the ROV is equipped with a two-speed transfer case and locking differentials, so it should be capable off the beaten path. Lexus also tells us its first side-by-side offers users a large amount of suspension travel. Is this purely theoretical, or is Lexus serious about taking on Polaris? We've asked, and we'll update this story if we learn more. Related Video: