Luxury car makers ready to pay for exclusivity

GENEVA (Reuters) - Luxury car makers such as Porsche to Lamborghini are prepared to earn less money in times of crisis if it means preserving the exclusivity of their respective brands.

Their sales may suffer from the latest global recession like the rest of car industry, but they still consider their budgets for research and development to be sacred, preferring to cut costs in other areas to adjust to the times.

Given the competitive nature of their business they want to keep fitting their cars with the latest technology so as to be prepared when their wealthy clientele return to the showrooms.

"We won't eat our potato seeds," Daimler's chief executive, Dieter Zetsche, told reporters at this week's Geneva Motor Show. "We will come out of the crisis in a better position."

Daimler would not flinch from spending the 10 billion euros ($12.5 billion) that it had allocated for research and development for the next two years, he said.

This drive to keep innovating was in evidence at the Geneva show, where luxury car makers unveiled their latest vehicles, such as Ferrari with its 599XX.

Another area where luxury car makers refuse to make cuts is in the price of their products, many of which go for more than 100,000 euros. Although such a move would help results in the short term, it would ruin the sense of exclusivity associated with their brands.

"We can't compete with less exclusive brands," Harald Wester, head of the Maserati brand of the Fiat group, told Reuters.

But costs must be cut, and this has led some of these manufacturers to shut down production to work off unsold inventory.

In a sign of the times, the waiting period for a new Lamborghini has shrunk to six months from 12 months.

Given the kind of clientele that it serves, the makers of luxury goods from watches to clothes to cars are usually protected from hard times.

But the current financial crisis sweeping the world has been so severe that even its wealthy customers have been touched by it.

"There is no immunity for luxury brands," Lamborghini's chief executive, Stephan Winkelmann, told Reuters.

According to his estimates, global sales for luxury cars fell by about 40 percent in the first two months of the year.

Both he and Amedeo Felisa, his counterpart at Ferrari, expect this year to see lower sales coming out of the United States, the world's single biggest market for super sports cars.

GENEVA (Reuters) - Luxury car makers such as Porsche to Lamborghini are prepared to earn less money in times of crisis if it means preserving the exclusivity of their respective brands.

Their sales may suffer from the latest global recession like the rest of car industry, but they still consider their budgets for research and development to be sacred, preferring to cut costs in other areas to adjust to the times.

Given the competitive nature of their business they want to keep fitting their cars with the latest technology so as to be prepared when their wealthy clientele return to the showrooms.

"We won't eat our potato seeds," Daimler's chief executive, Dieter Zetsche, told reporters at this week's Geneva Motor Show. "We will come out of the crisis in a better position."

Daimler would not flinch from spending the 10 billion euros ($12.5 billion) that it had allocated for research and development for the next two years, he said.

This drive to keep innovating was in evidence at the Geneva show, where luxury car makers unveiled their latest vehicles, such as Ferrari with its 599XX.

Another area where luxury car makers refuse to make cuts is in the price of their products, many of which go for more than 100,000 euros. Although such a move would help results in the short term, it would ruin the sense of exclusivity associated with their brands.

"We can't compete with less exclusive brands," Harald Wester, head of the Maserati brand of the Fiat group, told Reuters.

But costs must be cut, and this has led some of these manufacturers to shut down production to work off unsold inventory.

In a sign of the times, the waiting period for a new Lamborghini has shrunk to six months from 12 months.

Given the kind of clientele that it serves, the makers of luxury goods from watches to clothes to cars are usually protected from hard times.

But the current financial crisis sweeping the world has been so severe that even its wealthy customers have been touched by it.

"There is no immunity for luxury brands," Lamborghini's chief executive, Stephan Winkelmann, told Reuters.

According to his estimates, global sales for luxury cars fell by about 40 percent in the first two months of the year.

Both he and Amedeo Felisa, his counterpart at Ferrari, expect this year to see lower sales coming out of the United States, the world's single biggest market for super sports cars.