DETROIT • When share prices on Wall Street accelerate to new records, sales of luxury cars usually keep pace too.
Instead, reports of October sales on Wednesday showed that a collapse in sales of luxury sedans is gaining speed in the United States.
Consumers have gradually shifted over to luxury sport utility vehicles (SUVs) from sedans in the last decade.
But the trend - which has occurred in both the non-luxury and luxury segments of the auto market - was particularly pronounced last month.
Sales of Daimler's Mercedes-Benz S-Class, long a global benchmark for large, premium sedans, plunged 49 per cent last month.
Business has slowed by 24.8 per cent for the year to date.
General Motors' Cadillac brand is stuck in the slow lane too, selling just 779 of its CTS sedans last month.
Demand for that car, designed to compete with German luxury sedans, has hit potholes, down nearly 33 per cent for the year.
Cadillac's best-selling model this year is the XT5 compact SUV, whose sales have more than doubled from a year ago.
The shift within the luxury vehicle market from sedans towards SUVs of all sizes is forcing some of the most prestigious brands to scramble to add SUV models to their line-ups or boost SUV production to meet demand.
In the short term, there will be pressure to add consumer incentives to boost sedan demand, cut production or both, said Cox Automotive analyst Michelle Krebs.
"And we just don't see an end in sight to this trend."
According to automotive research company Kelley Blue Book's data, in 2007, luxury sedans made up 7.6 per cent of US new vehicle sales, while luxury SUVs carved out 4.2 per cent.
Through September this year, luxury SUVs made up just over 7 per cent of the market, compared with 4.9 per cent for luxury sedans.
In the short term, luxury brands could use holiday season sales promotions to clear slow-selling sedans, analysts said.
Toyota's Lexus brand said on Wednesday it would launch its December To Remember year-end promotion for the 18th straight year.
Longer-term, luxury car makers have to restructure their model line-ups, which have, for decades, reflected conventional thinking that the "flagship" of a luxury vehicle brand is a big sedan.
Industry executives and analysts predict that luxury brands will roll out more SUVs.
BMW and Mercedes-Benz are expanding their SUV plants in the US.
Some luxury sedans will disappear from line-ups, but not all, industry pundits forecast.
Lexus, for instance, is launching a redesigned version of its flagship LS sedan in the US next year, starting at about US$75,000 (S$102,000).
Established luxury car brands must also reckon with the impact of Tesla's electric vehicles, which have redefined the boundaries for advanced technology.
Carmakers are wary of being overtaken by more nimble competitors and are buckling up to offer what consumers really want - not just extra horsepower, for instance, said Mr Scott Keogh, head of Audi's US operations. That is one reason the brand, owned by Volkswagen, plans to launch an electric SUV by 2019 in the US.
Mr Sam Fiorani, vice-president of AutoForecast Solutions, said carmakers are keen to encourage consumers to buy luxury SUVs and crossovers as those models face less stringent fuel regulations and are far more profitable than sedans.
Mr Randy Parker, US head of Nissan's luxury Infiniti brand, said much also depends on the economy and petrol prices. But luxury brands "with a really robust SUV and crossover portfolio will... win in the next few years", he added.