Has Lincoln, Caddy lux run out?

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General Motors Corp.'s Cadillac and Ford Motor Co.'s Lincoln, once the rulers of America's luxury-auto segment, continue to lose ground to European and Japanese imports. Lexus is poised to keep the crown in 2001 as the best-selling luxury marque.

Toyota Motor Sales USA's upscale division was 7,067 units ahead of BMW of North America through November, according to Advertising Age sibling Automotive News. Last year, Lexus beat DaimlerChrysler AG's Mercedes-Benz USA by a mere 423 units.

Lexus predicts its share will rise in 2002, even though experts expect sales in the segment and the overall industry to slide. All three marketers cited their strong brand equity, high resale values, customer service and price-value offerings.

"We see our market share going up in 2002, but we think our total sales will stay relatively the same," said Mike Wells, VP-marketing at Lexus. He expects the first quarter "will be difficult from an economic perspective," but will start to improve in the second quarter.

Mr. Wells projected overall luxury-vehicle sales would fall to 1.62 million units of next year's 15.8 million industry tally, from this year's 1.67 million units of the industry's expected 17.1 million.

The redone, 2002-model ES300 sedan will help buoy Lexus sales next year, he said. The car's launch TV spots that broke in the fall from Publicis Groupe's Team One Advertising, El Segundo, Calif., return in late January. The RX300 sport utility is the luxury segment's best-selling model, with 69,345 units sold through November, according to Automotive News. Two weeks ago, Lexus announced a new model will be unveiled at the Detroit auto show in January.

In the first half of 2001, five of the top six luxury-car marketers decreased ad spending. Only Mercedes-Benz increased spending-just a bit-but its unit sales were flat.

Dave Schembri, VP-marketing, Mercedes, said the marketer expects to sell more vehicles next year to set the brand's ninth straight annual record. But, he said, the brand won't see the kind of dramatic annual sales' growth of the past. Mercedes had been hamstrung before by production limitations. "But now with more production, we're able to better meet demand."

Mercedes' ads next March for the fifth-generation SL roadster "will show the new spirit of Mercedes-Benz," said Mr. Schembri, who moved to his post in mid-August. "We are trying to polish the brand up in communications." Omnicom Group's Merkley Newman Harty & Partners, New York, handles.

The all-new C-Class coupe, which bowed in July, is the brand's entry-level model, starting at around $24,900. The marketer will sell as many C-Class models in 2002 as all Mercedes in 1993, he predicted. That year it sold 61,899 cars, according to Automotive News.

Susan Jacobs, president of auto consultancy Jacobs & Associates, said entry-level luxury models probably have the most incentive competition. Mercedes could indeed up sales in 2002, she believes, but with the C coupe, not across its entire lineup. Mercedes' could post higher gains than BMW of North America, with its all-new, top-of-the-line 7 Series next year.

The top three luxury importers may gain market share in 2002, but that doesn't mean their sales would rise over 2001, Ms. Jacobs added. "I don't think the luxury market is going to perform much better than the industry as a whole." That's because the economy is still stalled, with continued job losses.

American Honda Motor Co.'s Acura brand posted the biggest year-to-year growth in the category, up 25% through June and 20% through November, according to Automotive News.

Acura's success is "99.9% product," said Eric Conn, assistant VP-advertising, explaining the improvement. He said his biggest challenge next year is to keep Acura's momentum.

The all-new RSX sports coupe, which replaced the longstanding Integra this past summer, "is just really energizing our performance image."

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