European cars win status race
Executives gladly shell out $300,000 for a family car
By Miriam Kreinin Souccar

Published on August 07, 2006

After many years driving a lowly Toyota RAV4, Judith Glaser traded it in for a $50,000 BMW X3. The sport-utility vehicle comes with leather seats, Bluetooth wireless technology and soundless air conditioning.

"I wanted that splash, that luxury," says Ms. Glaser, the author of The DNA of Leadership and an executive coach. "Now if I pick someone up for work, the car instantly puts me in a certain category.

Executives who live and work in New York City still love their SUVs--that is, the ones made in Europe. In fact, it doesn't seem to matter if it's an SUV, a sedan or a sports car, as long as it comes from across the pond.

In sharp contrast to well-heeled drivers in other power centers, New Yorkers are refusing to let anything as petty as soaring gas prices get in the way of their four-wheeled status symbols. If hybrids like the Toyota Prius have become de rigueur in Hollywood and Washington, D.C., Mercedes and Maseratis rule the road among New York's elite.

Flash, not functionality

All you have to do is mention the name Prius to make these "autodidacts" shudder. In New York, the Prius has zero sex appeal. "I don't see hybrids happening here," says Daren Hornig, president of The Quest Group, a real estate services company. "New York overall isn't a green or environmentally friendly city."

The recent spate of Wall Street bonuses and hedge fund fees is definitely turning up in showroom sales. Executives who don't bat an eye when paying close to $100,000 for a vehicle such as a Porsche Cayenne Turbo consider the $60,000 sticker price for an Audi A8 chump change.

"I don't see much functionality going into people's choices," says Michael Prichinello, director of the Classic Car Club, a new organization for car enthusiasts in Manhattan. "It's all about flash and speed."

Local dealers of European luxury brands are reporting record sales. First-quarter sales at Maserati were up 62% from the previous year, mostly due to demand for its Quatro Porte, a new $115,000 luxury sports sedan. Maserati dealers report a long waiting list for the Quatro, considered reasonably priced for its target market. With four doors, it's a "family car."

BMW of Manhattan reports that sales are up 8.5% from January through July, compared with the same period last year. Right now, 25 people are waiting for the new X5. By the time the car arrives in the fall, the waiting list is expected to top 100--at a base price of $74,500. Another big seller is the 750, a larger sedan popular with CEOs. Not that they would think of actually driving it themselves: This kind of car demands a chauffeur. No 750s are in stock locally.

Michael Cohen, president of Silver Star Motors, a Mercedes-Benz dealership in Long Island City, Queens, says his 2006 revenue is up by double digits. A few months ago, Mercedes came out with a new SUV called the GL450, said to be the hot new mommy car. Last month, the company sold 1,000 more GLs than it had projected.

Range Rovers are also popular with soccer moms and dads. While European SUVs happen to get better gas mileage than their hulking American-made counterparts, that doesn't appear to have much bearing on their cachet among high-end buyers.

Hummer is a bummer

"Most people in the metro area aren't concerned with spending an extra $10 a week on gasoline," Mr. Hornig says. "People want to have an image, and they are out there to spend money."

Mr. Hornig just got rid of a Chevy Tahoe SUV and picked up a Mercedes E-Class sedan.

But even though gas efficiency isn't top of mind with local executives, the biggest guzzler of all is still considered the height of gaucheness. No high-end buyer would be caught dead in a Hummer.

"Anyone who is ordering a Hummer now is an idiot," says Ben Weshler, founder and president of marketing company Ovation In-Store, who is waiting for his new Mercedes S 550 sedan to arrive in October. "Even if you don't believe gas is an issue, it's almost as if you want to be the Antichrist of fuel economy."

Remember, members of this crowd usually have three cars. The SUV is just for tooling around and running errands. Nonetheless, driving a minivan is a faux pas, even for schlepping the kids.

E.J. Ridings, chief executive of Trump Mortgage, says he fought buying a minivan "tooth and nail," but finally succumbed because he has three small children. Even though he admits the van isn't so bad, he simply can't take the stigma of driving such a downmarket vehicle anymore.

In the next six to 12 months, his tots will bid goodbye to the Nissan Quest. "We're going to go from the minivan to the Maybach," says Mr. Ridings, referring to DaimlerChrysler's ultraexclusive family car, which seats six. It retails for over $300,000.

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