GO
Loading...

Luxury cars will be big driver on Black Friday

Wednesday, 27 Nov 2013 | 5:16 PM ET
BMW Series 4 Convertible
Source: BMW
BMW Series 4 Convertible

Forget standing outside your favorite store waiting for the doors to open so you can get an incredible deal. The real action on Black Friday this year is in the showroom.

Just ask Earl Hesterberg, president and CEO of Group 1 Automotive.

"This year there will be a lot more people out on Friday," he said. "We're out marketing, advertising and trying to make sure buyers know we'll be ready for them."

While Hesterberg admitted that Black Friday isn't usually identified as a big day for auto sales, Kelley Blue Book is estimating sales will be 3.6 percent higher than that day last year. That would be an impressive gain, as Black Friday in 2012 saw strong sales spurred by a rebound on the East Coast after Hurricane Sandy.

(Read more: Rent-your-car service gets green light at SFO)

"Sales in November tend to be heavily skewed toward the end of the month because of Black Friday sales events, such as General Motors' current supplier pricing promotion and deals on Ford models, so [the month's] sales could surpass current expectations if the available deals are especially enticing," said Alec Gutierrez, senior analyst for Kelley Blue Book.

Luxury rides rolling strong

The biggest sales on Friday may be racked up by the luxury automakers, who are all aggressively marketing holiday specials. Whether it's Lexus running its annual December to Remember Sales Event, or BMW promoting its Happier New Year Event, the luxury automakers have been working harder than ever to close out the year with strong sales.

"This November, our luxury sales have been stronger than they've been in years," Hesterberg said. "All these brands are out there are trying to outdo each other, and they are running their ads much earlier than in the past."

Auto sales to pop?
CNBC's Phil LeBeau, Robert Frank and Tyler Mathisen weigh in auto sales as Black Friday approaches. LeBeau says it's a fantastic time for dealerships because people are off for the long holiday weekend.

December has traditionally been one of the strongest months of the year for luxury auto sales. Part of the reason is the heavy marketing of upscale names as they try to end the year as the top-selling luxury brand in the U.S. Through October, Mercedes-Benz led BMW in the race by 5,005 vehicles, according to the research firm Autodata.

Another reason luxury typically sells during the holiday: Executives are spending their year-end bonuses. But another factor this year is the explosive growth in new models priced under $40,000. Those cars have luxury automakers increasingly winning over buyers who typically buy a mass-market brand such as Toyota or Ford, Hesterberg said.

(Read more: Hot battle among automakers: Luxury under $50K)

"The luxury brands are dipping down a bit in price, and people are noticing," he said.

Strong close to November

Increasingly, Wall Street expects the November sales pace to be higher than that in September and October. JPMorgan estimated the November sales rate at 15.9 million vehicles, with the retail sales rate coming in at 13.2 million.

What's generating the business this month?

Experts said that the answer—as it has been for most of the year—is pent-up demand from people owning older cars. Pickups and SUVs are among the most sought-after vehicles in showrooms, which is not surprising given the moderate gas prices.

Hesterberg said that having so many people off on Black Friday means more traffic in the showroom.

"If the weather is nice, people will be out," he said. "Some will be bringing their cars in to be serviced, and others will just be in taking a look around and hopefully buying."

—By CNBC's Phil LeBeau. Follow him on Twitter @LeBeauCarNews.

Questions? Comments? BehindTheWheel@cnbc.com.

  Price   Change %Change
GPI
---
GM
---
F
---

Featured

  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

Autos