LITTLE ROCK — Lamborghini SpA is shrugging off the economic recession by flaunting the most expensive high-performance vehicle it's ever produced.
Undeterred by a 40 percent slump in the luxury-car market in the past 12 months, the Italian automaker used the Frankfurt Motor Show that opened last week to unveil the $1.6 million Reventon Roadster supercar, the costliest model it has ever made.
"We genuinely trust that this market will come back, and we want to be ready when it happens," Chief Executive Officer Stephan Winkelmann said at the trade fair, where the Reventon Roadster is the most expensive model on display.
Lamborghini, a unit of Volkswagen AG, has collected orders for about 12 of the 15cars it plans to produce. Buyers include U.S. celebrities and the Swiss owner of a butcher chain.
Ferrari, Bentley and Bugatti are among companies following Lamborghini's lead at the Frankfurt show, which runs through Sept. 27. While mainstream automakers tout small, cheaper city cars and fuel-efficient alternatives, the supercar market "is essentially recession-proof" because demand exceeds supply even in a slowdown, said Andrew Close, an analyst at IHS Global Insight in London.
"At worst they've shortened their waiting lists, but their volumes are so low and there are still plenty of emerging-market millionaires waiting to buy the latest models," he said.
Customer waiting times for receiving a Lamborghini model have shrunk to six monthsfrom a year, while deliveries in the first half of 2009 dropped by 37 percent. The Sant'Agata Bolognese, Italy-based company, founded in 1963 by Ferruccio Lamborghini, a wealthy tractor manufacturer, sold a record 2,430 cars last year. But the global recession has forced it to put almost one-third of its work force on shortened hours since February, and it may extend the cutbacks until at least the end of the year, Winkelmann said.
Also at the Frankfurt show, Ferrari unveiled the 458 Italia model, which was developed in consultation with seventime Formula 1 world champion driver Michael Schumacher and carries a $290,000 price tag.
"This is an extreme car," Ferrari Chairman Luca Cordero di Montezemolo said at a press briefing alongsideSchumacher. The 458 features an eight-cylinder engine positioned behind the front seats that generates 570 horsepower.
Autos at the top end of the luxury market sell for more than $220,000 and include brands such as Ferrari, Lamborghini and Bugatti, Close said. Bugatti is owned by Volkswagen, Europe's biggest automaker, and Ferrari is part of Fiat SpA. The so-called premium segment features cars that cost $118,000 to $220,000, including brands such as Porsche SE and Fiat's Maserati SpA.
Demand from traditional buyers is still tumbling in the United States, Asia and the Middle East after the credit crisis cost 313,000 banking and brokerage jobs globally, according to Bloomberg data.
Yet another luxury unit of Volkswagen is Crewe, England-based Bentley, which along with Rolls Royce was long considered a traditional symbol of English luxury. Franz-Josef Paefgen, Bentley's chief executive officer, predicts that a recovery in the high-end segments won't come before 2011.
That hasn't stopped Bentley from showing its new Mulsanne at the Frankfurt show. The sedan features the "most elegant and luxurious" cabin the company has ever designed, according to Paefgen. As many as 45 hours are needed to hand-stitch the steering wheel.
"There may be a grim environment out there, but we're not in the business of downsizing our products," he said. "The brand has to remain exclusive. That's what our customers expect."
The premium market has suffered more than the topend luxury segment, according to a PricewaterhouseCoopers study published Sept. 8.
Buyers are turning awayfrom large sedans in the premium class because prices for such vehicles have increased "disproportionately," PricewaterhouseCoopers said. The cost of Daimler AG's Mercedes-Benz S-class now equals 2.5 times a workers' annual average salary, while in 1975 it was 1.5 times the annual paycheck, the study found.
"Engine speed and ground acceleration are losing in significance for buyers," said Harald Kayser, head of automotive research at PricewaterhouseCoopers. "There's a clear trend toward small premium within the premium segment."
Rolls-Royce, like Bentley, is now owned by Germans. It is BMW's highest-priced brand but is introducing a more utilitarian model aimed at helpingthe division double sales next year as the luxury-car market gradually revives.
The Ghost model, with a smaller engine but more horsepower than Rolls-Royce's mainstay Phantom design, willsell for $339,000, about 60 percent of the Phantom's price. Chief Executive Officer Tom Purves said the car is designed to appeal to people who don't already own a Rolls-Royce and may enable the Goodwood, England-based company to deliver as many as 2,500 cars by 2010.
Further down the luxury price line is Toyota Motor Corp.'s Lexus brand, which last week presented the LF-Ch compact hybrid concept car in Frankfurt. Among models ready for sale, Lexus is offering the 2010 version of its RX sport utility vehicle with new technology and equipment for $36,000, some $900 cheaper than the 2009 version.
"Unrestrained consumption is anything but in fashion during difficult times," said Stefan Bratzel, head of the Center of Automotive Research Institute in Bergisch-Gladbach, Germany. "A lot of wealth was burned during the crisis. Premium automakers can no longer rely on the rich to spend."
Business, Pages 75, 82 on 09/20/2009