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Luxury car brands scrambling to avoid a blue Christmas

DETROIT — When financial markets surge to new records, sales of luxury cars usually rise, too. Instead, October U.S. auto sales reports on Wednesday showed that a collapse in sales of luxury sedans is accelerating. Consumers have gradually shifted over to luxury sport utility vehicles from sedans in the past decade, but the trend — which has occurred in both the non-luxury and luxury sedan segments of the auto market — was particularly pronounced in October. Sales of Daimler AG's Mercedes-Benz S-Class, long a global benchmark for large, premium sedans, plunged 49 percent in October, and are down 24.8 percent for the year to date. General Motors' Cadillac brand said it sold just 779 of its CTS sedans in October. Demand for that car, designed to compete with German luxury sedans, is down nearly 33 percent for the year. "There's still a significant portion of the market that wants a car, but I'm sure there were people who preferred a horse to a car at one point." Cadillac's best-selling model this year is the XT5 compact SUV, which has more than doubled sales from a year ago. The shift within the luxury vehicle market away from sedans toward SUVs of all sizes is forcing some of the most prestigious brands to scramble to add SUV models to their lineups or boost SUV production to meet demand. "In the short term, there will be pressure to add (consumer) incentives, cut production or both," said Cox Automotive analyst Michelle Krebs. "And we just don't see an end in sight to this trend." The Dow Jones Industrial Average has been trading at all-time highs, usually a good sign for luxury sedans, but as major automakers reported new U.S. vehicle sales for October on Wednesday, sales for passenger cars continued their slide while luxury SUV and crossover sales rose again. According to Kelley Blue Book data, in 2007 luxury sedans made up 7.6 percent of U.S. new vehicle sales, while luxury SUVs made up 4.2 percent. Through September this year, luxury SUVs made up just over 7 percent of the market, compared with 4.9 percent for luxury sedans. In the short term, luxury brands could use holiday season sales promotions to clear slow-selling sedans off dealer lots, analysts said. Toyota's Lexus brand said on Wednesday it will launch its "December to Remember" year-end sales promotion for the 18th straight year.

Mercedes-Benz A45 AMG shows up to fight the hottest hatches [w/videos]

Fun coincidence. On the same day that Audi announces the unveiling of its new S3 Sportback at the Geneva Motor Show, Mercedes-Benz steals the spotlight by confirming that the all-new A45 AMG will also receive its official debut early next month. Starting life as the entry-level A-Class hatchback, the A45 AMG gets the full AMG treatment, which includes numerous performance, handling and styling upgrades.
Under the hood sits an AMG-tuned 2.0-liter turbocharged I4 breathing through a sport exhaust system helping the five-door produce 360 horsepower and 332 pound-feet of torque. This engine is paired to a seven-speed AMG dual-clutch transmission and power is sent to the ground using 4Matic all-wheel drive. Mercedes-Benz says that the A45 AMG will be able to accelerate from 0-60 miles per hour in under 4.5 seconds and it will have a top speed of 155 mph; in the land of hot hatches, it doesn't get much hotter than that. For added performance and handling, AMG has retuned the A-Class' suspension and steering systems and equipped The A45 with a three-stage stability control system that is specific to this car.
Surprisingly, the exterior styling of the A-Class was already sporty enough that the new model doesn't receive too many changes to become the A45 AMG. The biggest alterations include black accents to the chin spoiler, rocker panels and mirror caps, black wheels with red-painted brake calipers and rectangular dual exhaust outlets. Inside, it doesn't take a trained eye to spot the differences. The flat-bottomed sport steering wheel and the numerous red accents throughout the cabin (including the seatbelts!) really help to make this AMG interior stand out; front passengers will also get sport bucket seats that appear to be more than supportive enough for even the most spirited driving conditions.

Aston Martin and Mercedes-AMG formalize technical partnership

The development of a partnership between Mercedes-Benz and Aston Martin has been a long time coming. The news dates back to 2008, and over the five years since was supposed to lead to a rejuvenation of both the Maybach and Lagonda brands. That program ultimately fell apart, but the tie-in was forged afresh in July when the two automakers signed a letter of intent over a renewed partnership. And now that partnership has been formalized.
In a deal just announced, Mercedes-AMG will build a new V8 engine for Aston Martin that will power a new generation of luxury GTs for the British marque, presumably to replace the 4.7-liter V8 in the Vantage. The relationship appears to be similar to the one already in place between AMG and Pagani, only in this case, will involve Daimler taking as much as a five-percent stake in Aston Martin and an observer seat on Aston's board.
The technical partnership is also set to lead to the supply of electric and electronic systems, and could incorporate "additional areas of cooperation in the future." Whether that will include a fresh attempt at reviving Lagonda remains to be seen, as does the future of Aston's long-serving, Ford-based 6.0-liter V12 engine. But for now you can read the full announcement below.