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Luxury Makes A Comeback At Detroit Auto Show

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Luxury Makes A Comeback At Detroit Auto Show

Business

Luxury Makes A Comeback At Detroit Auto Show

Luxury Makes A Comeback At Detroit Auto Show

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  • <iframe src="https://www.npr.org/player/embed/132866081/132872487" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Porsche unveils its 918 hybrid sports car during the North American International Auto Show. i

Porsche unveils its 918 hybrid sports car during the North American International Auto Show. Stan Honda/AFP/Getty Images hide caption

toggle caption Stan Honda/AFP/Getty Images
Porsche unveils its 918 hybrid sports car during the North American International Auto Show.

Porsche unveils its 918 hybrid sports car during the North American International Auto Show.

Stan Honda/AFP/Getty Images

After a few very dismal years, the automakers are back. No, this time we are not talking about Ford, GM or Chrysler. Think upscale — Porsche, Ferrari or Bentley.

Now that the economy is showing signs of a recovery, so are the highest of the high-end luxury cars.

Bentley, the luxury carmaker owned by Volkswagen, was at the North American International Auto Show in Detroit last year. But it had no new models to show off.

This year things are different. The company brought three new models that have been completely redesigned. The new cars are also quite popular: The 2011 Bentley Mulsanne is sold out.

A $150,000 Starter Car

Who is willing to spend more than $150,000 on a starter Bentley?

"People that absolutely recognize the value of a car like this — the beautiful craftsmanship, the sensuous refinement, if you like, in the car, and you've got authenticity," says Alasdair Stewart, a board member in charge of sales and marketing for Bentley.

According to Stewart and Franz-Josef Paefgen, Bentley's outgoing CEO, sales are up 11 percent over last year. In his press conference, Paefgen was optimistic about the company's future growth.

A 30 Percent Increase In Porsche Sales

Sales are also increasing for other luxury carmakers. For the past three years, the auto market was so weak Porsche didn't even attend the auto show. In 2010, sales for Porsche were up 30 percent.

The Bentley Continental GT on display during the North American International Auto Show in Detroit. i

The Bentley Continental GT on display during the auto show. The company's 2011 models are quite popular. Stand Honda/AFP/Getty Images hide caption

toggle caption Stand Honda/AFP/Getty Images
The Bentley Continental GT on display during the North American International Auto Show in Detroit.

The Bentley Continental GT on display during the auto show. The company's 2011 models are quite popular.

Stand Honda/AFP/Getty Images

Riding the big sales increase, Porsche came back to the Detroit show with new models and even introduced a brand new concept hybrid racing car.

Steve Janisse, a spokesman for Porsche, says it was more than just a bad economy that hurt the German automaker. He says it was more of a mindset that kept the wealthy from buying the company's cars.

"The ones who are buying the cars still had the capability and the capacity to buy a luxury sports car," he says. "They didn't want to be seen as the one on the block who just went and bought a new Porsche, or a new Ferrari, or a new Bentley — whatever it may be — if their neighbor just lost their job."

Sales Driven By SUVs, Four-Door Sports Cars

That's not necessarily to say conspicuous consumption is roaring back. Janisse says Porsche's SUV and four-door sports cars are driving sales. He says a four-door may be perceived as less ostentatious than a two-seater.

Rebecca Lindland, an automotive analyst for IHS Global Insight, says buyers of luxury brands are trying to be more subtle.

"People are coming in and ordering the exact same car, just a new version of it ... so that people don't know that they've gotten a new car, which I thought was very symbolic," she says.

A Small Sliver Of The Car Business

To be clear, Lindland notes that the high-end luxury market is just a small sliver of the overall car business.

"They’re in a completely different business. They operate in their own world," she says. "They have their own realm."

Lindland says high-end companies, such as Bentley, view owning one of their cars as a privilege, and so do their customers. She says such sales are symbolic, but not indicative of the overall market.

For example, Porsche sold just over 95,000 cars in 2010. That's just a drop in the bucket compared with the millions of cars sold last year by Ford and Toyota.

"Think of it as a bespoke suit, or a work of art," says Bentley's Stewart.

A Glimpse Of What's To Come

Auto show veterans say that you can see the health of the entire industry at this year's North American International Auto Show.

Despite having left his most recent post as vice chairman at General Motors, Bob Lutz made a return to the show to meet with friends and former colleagues, and to help sell one of the projects he's working on — an electric motorbike.

Lutz says the tone of this year's show is different. "Comparing to recent ones, it's a lot more upbeat. There's more color, more light — more new models."

Regardless of the high-end automakers' splash, Lutz thinks this will be remembered as the year when people first understood that "the domestic automobile industry is back to being No. 1."

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