BMW, for example, is offering interest rates as low as 1.9% on some new models, and has been focusing more heavily on its certified pre-owned program as well. BMW is also one of the carmakers most concerned with offering a green image, touting its availability of diesels and preparing to introduce its first pair of hybrids to the U.S. in the form of the ActiveHybrid X6 and 7-series.

Bentley is also offering very low financing rates–as low as 0.9%–on the $179,000 Continental GT. Porsche is likewise offering deals, but in the form of cash back. Average cash incentives on newly-purchased Porsches for the year through August were $4,412, a rise of 657% from last year, according to the Detroit Free Press.

Even Mercedes-Benz is offering low 1.9-2.9% rates and special lease pricing on some of its vehicles, notably the C-Class Sedan, CLK-Class cabrio and CLS-Class four-door coupe. Mercedes is no stranger to diesel or hybrid vehicles either, recently introducing the S400 hybrid sedan to the U.S. to help win eco-conscious buyers that still want a luxury image. The S400 hybrid is, incidentally, the most affordable S-Class as well.

The bottom line to all this? If you’re in the market, now’s a great time to buy. With forecasted slow but steady rises in vehicle sales throughout 2010, these deals will slowly fade away, but in the mean time, there are serious savings to be had.

If the partnership moves ahead, look for Renault to get a version of the diminutive four-door.

Smart is no stranger to the four-door segment as it produced the ForFour between 2004 and 2006. However, sales weren’t as good as expected, forcing Smart to pull the plug on the project. No word on when the new-age ForFour might bow.

Smart is also said to be working on a sportier three seat model dubbed the ForThree.

It’s supercar performance won’t hurt in standard 6.2L V8 trim, with 571hp to shred the rear tires and a 48-52% front-rear weight distribution. Routing the power to the ground is a 7-speed dual-clutch gearbox that will combine the performance of a manual with the smoothness of an auto, running the car to 62mph in 3.8 seconds.

But the real game-changer for AMG and Mercedes both will be the possible electric drive reported by AutoWeek. With output almost matching the brawny V8 at 526hp, the new system will be called ‘eDrive’ and will gain drive in the front wheels as well.

Top speed would be limited to about 120mph, and acceleration is expected be around 4.0 seconds to 62mph, however, somewhat short of the V8 SLS’s 3.8-second run and 196mph top speed.

Don’t get too excited about the electric supercar yet, however – it’s not expected to hit production until 2015.

But a little over a year later, Daimler and other luxury carmakers are struggling in a downturn that has buffeted the fanciest nameplates as severely as the rest of the industry.

Daimler reported this week that its Mercedes-Benz Cars division lost $460 million in the fourth quarter of 2008 and it forecast lower Mercedes sales for this year. Moody’s Investors Service lowered its outlook for Daimler and said it may cut its credit rating for BMW, citing concerns about the companies’ profitability.

In contrast with past recessions, this slump is hurting many wealthy people who usually ride out economic ups and downs.

“This recession is one that is not respectful of social class,” said Johan de Nysschen, president of Audi of America. “It’s one that’s cutting very deeply at all layers of society.”

Many premium car buyers work in two of the economy’s most troubled sectors, banking and real estate. People with big savings have seen a steep erosion in their personal wealth — and that hasn’t bottomed out. Last month was the worst January on record for the New York Stock Exchange.

In the United States, traditionally the most lucrative auto market, Mercedes sales plunged 42.9 percent and Cadillac sales slumped 42.5 percent in January, compared with the overall market’s 37.1 percent drop. Bentley sales were off 74.7 percent, while Porsche’s fell 36.1 percent.

While the declines reflect the severity of the recession, auto executives and analysts say underlying trends are aggravating the downturn in luxury car sales — and they worry those may persist well beyond the recession.

One is a newfound austerity that appears to be a backlash to the conspicuous consumption that characterized the booms of recent decades.

“As far back as 2007, a trend away from ostentation and bling was already being remarked on,” said Donna Boland, a spokeswoman for Mercedes-Benz USA in Montvale, N.J. “The economics have accelerated dynamics that were already in place.”

Analyst Rebecca Lindland at consulting firm IHS Global Insight said there were no hard figures. “It’s more anecdotal, but it’s something we’re watching,” she said. “We may see a kind of change in attitude where it may not just be about flaunting your wealth.”

Some luxury brands may be able to withstand this shift in taste better than others, Lindland said. “I think Audi and Acura are two of the less vulnerable brands because they tend to be more understated, and a little more under the radar.”

No desire to show off

In any kind of downturn, people are reluctant to show off, said Jack Nerad, market analyst at Kelley Blue Book.

But the trend is more pronounced in this recession, he said, because of another long-term shift: growing concern for the environment, the effect of car emissions on the earth’s atmosphere, and the planet’s dwindling resources.

A look at who buys the Toyota Prius hybrid, which starts at $22,000, shows how these two trends are dovetailing, he said.

“A lot of potential luxury car customers went into Prius,” Nerad said, while Toyota’s premium Lexus hybrids “have largely fallen flat.”

Prius buyers earn more than $100,000, on average, and many of them could easily afford a flashier nameplate, he said.

Pam Danzinger, president of Unity Marketing, a consulting firm in Stevens, Pa., that studies buying patterns of wealthy people, says premium car purchases fell by almost half in the firm’s fourth-quarter survey after holding steady for several quarters.

“We see more of the affluent reporting that they bought a mass-market brand with luxury features rather than a luxury brand,” she said.

But rather than becoming discreet, Danzinger believes wealthy people want more value for their money. “They’re no longer willing to pay a $20,000 premium to have a Lexus or Mercedes-Benz brand logo.”
Why pay more?

In recent years, as mass-market brands introduced more entertainment and safety features into their models, auto executives have wondered if that might undermine the luxury car business. Traditionally, new technology was available first on luxury vehicles and then, years later, in more affordable models.

But that time gap is shrinking. “As we get more sophisticated, popularly priced cars with features like navigation, a vast array of safety equipment, fantastic sound systems, it becomes harder to justify a luxury brand purchase,” Nerad said.

Pointing to Hyundai’s luxury aspirant, the $32,250 Genesis car, he said: “You can get a non-luxury brand that virtually sings and dances for you.”

Not surprisingly, most luxury carmakers dismiss the idea that luxury is losing its appeal.

“I don’t have indications that our clientele would prefer to drive in small cars that are less safe and less comfortable,” Daimler CEO Dieter Zetsche said.

“What they want,” he said, perhaps because of social pressures tied to the environmental movement, “is lower fuel consumption.” And Daimler will provide that, he said this week.

Toyota’s Lexus, the top-selling luxury brand in the United States, expects premium auto sales to recover. “We are still bullish that the luxury market will grow faster than the mass market in the long run,” said Mark Templin, general manager of Lexus in North America.

“But it may be different,” he said, with more smaller and fuel-efficient vehicles in the luxury lineups of the future.

Executives at BMW say their customers are still loyal to the brand, but some are opting for smaller models. “We see some customers switching from bigger engines to smaller engines, and from larger series to smaller series, from the 5 Series to the 3 Series for example,” said BMW spokesman Jan Ehlen.

A slowdown in leasing linked to the turmoil in the credit markets affected a few brands, such as Cadillac, but did not have a big impact on most luxury brands.

But if the shifts in the luxury car market persist, they will pose a serious challenge for manufacturers. Already, rising cost pressures and falling sales are putting pressure on them. “We have to figure out a way,” Templin said, “to make it as profitable” as the business has been traditionally.

In Germany, Porsche has joined forces with Volkswagen AG, and its Audi brand, while BMW and Mercedes are exploring ways to cooperate and share costs.

In an effort to retain their cachet and their pricing power, luxury carmakers are developing models featuring advanced engine and other technologies to tap into the green movement.

Toyota will introduce the first Lexus designated hybrid, the HS 250h, in the fall, while Mercedes will introduce two hybrid models at the end of the year.

BMW outperformed most of its rivals in January after launching an ultra-clean diesel version of its X5 SUV late last year.Roger Olsen, sales and leasing manager at Suburban Porsche and Audi of Farmington Hills, says Audi sales at the dealership were up in the fourth quarter and in January, helped by new models such as the small and stylish A4.

But Porsche sales were down. Olsen is doing good business with out-of-state buyers attracted by the discounts. “People realize, if you’ve wanted a Porsche,” he said, “there’ll never be a better time to get them.”

But there aren’t many takers in Michigan for the legendary sports cars.

“A sports car is, let’s say, a reward,” Olsen said, and not many people feel like rewarding themselves.

The Japanese bought 219,231 imported vehicles in 2008, down 17.3 percent from a year earlier, said the Japan Automobile Importers Association. The figure, which includes vehicles made by Japanese automakers abroad, marked the lowest sales since 1993.

U.S. and other foreign automakers have long struggled to gain a foothold in Japan’s car market and imported vehicles make up only 7 percent of annual sales of new vehicles in Japan.

Foreign cars — especially European models — are seen as a status symbol among the wealthy, but most Japanese prefer domestic cars made by companies such as Toyota Motor Corp. and Honda Motor Co. for their reasonable prices and compact sizes.

“Sales started to fall around mid-2008 due to high oil prices, but what really plummeted sales was the current recession,” said Yasuhiko Yokota, a spokesman for the association. “Consumer sentiment rapidly deteriorated in late 2008, and a plunge in sales was unstoppable.”

Japan, the world’s second-largest economy, slipped into recession last year, hit by the U.S. financial crisis and global downturn.

Germany’s Volkswagen AG sold 45,522 vehicles last year, ranking top among foreign automakers with a 20 percent share in Japan’s imported vehicle market.

Mercedes-Benz brand cars came in second with sales of 37,002 units, or 17 percent of the imported vehicle market share. BMW AG ranked third, selling 35,945 units last year.

Ford Motor Co. sold just 3,818 vehicles in Japan and Chrysler LLC sold only 1,593 units.

Japanese automakers are also struggling to shore up sagging sales at home and abroad, cutting jobs and production to cope with shrinking global demand.

Sales of new vehicles in Japan fell to 3.2 million units in 2008, the lowest in 34 years, according to the Japan Automobile Dealers Association.

With the economy going through some tough times, one has to wonder where all these cars going to be sold, as each of them command a $100k+ sticker price. The new Lagonda models are designed to fight within the same class as Mercedes S class. Of course the portfolio of current Aston Martin owners must not be too shabby, as even older examples command at least $50k on eBay.

Lagonda will begin it’s revival with the updated version of the Rapide as shown below.

Mimicking similar statements made by Mercedes Benz last July, BMW’s EfficientDynamics chief engineer has revealed plans for the carmaker’s future powertrains and expressed his desire to see waste-exhaust power generation systems fitted across the lineup. As carmaker’s battle with tough environmental regulations being introduced across the United States and Europe, new and innovative methods of improving efficiency are being investigated in the quest to maintain power while reducing fuel consumption and emissions.

One of the simplest and most effective methods of boosting power while reducing displacement is the introduction of a turbocharger system, something BMW has done to great effect with its award-winning N54 3.0L straight-six engine. However, there are more advanced systems currently in development that could be making their way to production very soon.

Speaking with WhatCar?, BMW’s Dr Stephan Neugebauer said further efficiency improvements could be brought about via the introduction of heat-energy recovery systems – the heat being the wasted hot exhaust gases.

BMW is currently working on two designs: a ‘turbo steamer’ that uses the exhaust heat to create electricity and a similar set-up to store mechanical energy. In May the carmaker showed off a 5-series sedan with a thermoelectric generation system installed, and before that Honda showed off its own version of the technology.

Some of the technologies available include installing a special thermoelectric material that can generate electric simply by being heated, adding a turbine-generation system, or even something as simple as installing solar panels on the roof.

Neugebauer also revealed that he hoped BMW would be able to make it fall within a cost range that would allow it to fit it into all its cars.

Mercedes Benz has offered a diesel model under its AMG label (in Europe at least) as well as a SUV, and BMW’s usually stringent M Division is currently working on a pair of new SUV models and has even hinted at installing a hybrid energy-recovery system in its future models, but the guys at quattro Gmbh won’t have any of that when it comes to Audi’s RS sports models.

Audi’s head of powertrain development, Wolfgang Hatz, has revealed in his latest interview the future plans for the RS models and the shortcomings of expanding into the SUV, hybrid and diesel segments.

Speaking with MotorTrend at the recent Paris Motor Show, Hatz explained that a traditional petrol-electric hybrid system would simply add too much weight because of the required batteries. As for an energy-recovery system like the KERS being developed for F1, Hatz states that it wouldn’t be worthwhile in a vehicle weighing three times as much as an F1 car. Furthermore, he adds that packaging it safely and conveniently in the engine compartment would be difficult.

Modern diesel engines, meanwhile, have shown that they can match their petrol equivalents when it comes to the performance stakes. Audi’s own R10 Le Mans racer has a number of titles under its belt. But putting a big V10 or V12 diesel engine, like the one in the recently revealed R8 TDI concept, would only be applicable in something like a Q7 RS model. However, Hatz is ultimately against adding a tall and heavy SUV to the RS lineup. He also started that a diesel engine’s characteristics don’t fit very well with those of the target RS buyer.

Instead, he sees more dual-clutch transmissions making their way across the RS range in the near future. There will be two different designs – dry clutches for lighter low, torque applications, and wet clutches in heavier, higher torque vehicles.

These new technologies will help Audi stay at the forefront of innovation as all manufacturers move to greener cars.

The new S4, will reportedly achieve 24mpg with the help of the supercharger and direct injection.

The news of Audi collaborating with a North American supplier for superchargers, comes just a day after the head of engineering at Mercedes Benz confirmed all of their vehicle offerings by 2010 will be turbocharged.

If I were a tuner, I would get crackin’ on remapping the software for these cars and bumpin’ the boost.

Check out www.audiforum.ca for more info…

BMW

Chrysler

Ford

GM

Hyundai

Isuzu

Mitsubishi

Nissan

Porsche

Suzuki

Toyota

VW

The following increased in sales marginally:

Mercedes

Honda

Mazda

Subaru

GM still managed to outsell Toyota by a hair, largely due to their last minute month ending sales promotion with 0% financing.

Chrysler dropped the most in sales, a staggering 36% from last years sales numbers. Toyota, is down an overall 20% from last years sales, year-to-date, which is very troublesome.

Important to note, the Dodge Dakota’s sales fell 49% from last year and the Ram fell 48% from last years June sales. This puts the manufacturer in hot water, as it has relied on it’s SUV and truck divisions for years to create profit.

In the Ford camp, the sales of the Expedition declined 59.8% from last year and the Explorer dropped 52%.

Toyota’s Tundra fell 47% in sales, while GM’s Silverado only fell 23%.

Overall the situation is looking serious and it is very disheartening to be a part of the auto industry these days. June has one less weekend and fewer selling days this year then last, which might have contributed to the less then stellar results of the month.