Luxury cars have fallen in value as the US economy struggles to grow, a sign the industry is struggling to keep up with demand, analysts say.
Read moreThe drop in luxury car sales comes as automakers are struggling to meet growing demand, and many automakers are selling off or selling parts to suppliers who make them more cheaply.
“The luxury car market is suffering a massive decline, and this is not a product market where you can build a profit margin,” said Richard Dye, an analyst with Forrester Research.
“It’s a market where there are so many components, components that have to be sourced from different countries.”
Dye said automakers are moving to produce cars with higher-end materials and materials that are more expensive to manufacture.
That means less profit for them.
“They’re doing that, so they have to keep spending money on marketing and the price of the car,” Dye said.
“That’s why we’re seeing a big decline in the luxury car segment.”
Drywall is the only major luxury car maker that hasn’t reported any sales declines this year.
The company says it expects sales to decline by 5% in the second quarter, while adding that it is “encouraged by the pace of demand for its luxury sedan products.”
The company also reported that its luxury-brand vehicles were up 7.3% in sales in the quarter.
The firm says it will sell more of its brand-new models in the coming months.
The luxury brand is the mainstay of the luxury-car industry.
The U.S. luxury market has seen record growth in recent years, and manufacturers are now looking to the Asian market, where there is demand for cars with more upscale interior materials.