Tags: economy

Wealthy Americans Losing Splurge Mentality

By    |   Monday, 13 Oct 2008 02:57 PM

Wealthy consumers may not be cutting back on expenses like the average consumer, but that doesn't mean they're not being affected by the current economic climate. It's just less obvious.

Wealthy Americans are losing "that splurge mentality" in today's souring economic climate, Susan Jacobs, president of auto consultant Jacobs & Associates, told Advertising Age.

"It used to be believed that the super-affluent buy what they want, when they want," she said.

But the major declines in real-estate value, the stock market, and other economic indicators do "have an impact at the upper end."

Bentley Motors' U.S. sales dropped about 25 percent this year. A company spokesman attributed the decline to "a combination of market conditions and new-product cadence."

Sales for Aston Martin and Porsche also dropped more than 15 percent each through August compared to a year ago.

Mercedes-Benz USA's Maybach division fell nearly 8 percent in the same period, and sales of Ferrari-branded cars dropped to 1,80 from 1,173 in the eight-month period.

Domestic sales for Rolls-Royce, however, were up 5 percent from a year ago.

According to Jacobs, sales of new vehicles in the $100,000 range are falling for "more psychological than practical" reasons.

Bentley research shows that wealthy consumers are questioning whether it's socially acceptable to buy big-ticket items like high-end cars or yachts.

Consumers with net worths between $3 million and $5 million "are second-guessing their high-end purchases because of the economy," a Bentley spokesperson told Ad Age.

But declining stock portfolios are not keeping the wealthy from taking luxury vacations.

"They're very concerned about the economy, the political uncertainties, all of those things, but they're not changing their buying patterns because if it, yet," Martha Wharton, vice president of marketing, TCS Expeditions, told CNN.com.

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Wealthy consumers may not be cutting back on expenses like the average consumer, but that doesn't mean they're not being affected by the current economic climate. It's just less obvious.Wealthy Americans are losing "that splurge mentality" in today's souring economic...
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2008-57-13
Monday, 13 Oct 2008 02:57 PM
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