World Economic

FRANKFURT, GERMANY — Lamborghini SpA, Ferrari SpA and Bentley Motors Ltd. are shrugging off the economic recession and flaunting some of the most expensive high-performance vehicles they’ve ever produced.

Undeterred by a 40 percent slump in the luxury-car market in the past 12 months, Lamborghini used the Frankfurt Motor Show to unveil its $1.6 million Reventon Roadster supercar, its costliest model yet.

"We genuinely trust that this market will come back and we want to be ready when it happens," Lamborghini Chief Executive Stephan Winkelmann said. The Italian unit of Volkswagen AG has collected orders for about 12 of the 15 cars it plans to produce. Buyers include U.S.-based celebrities and the Swiss owner of a butcher chain.

While mainstream automakers tout small, cheaper city cars and "green" 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.

Ferrari unveiled its 458 Italia model, which was developed in consultation with 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 alongside Schumacher. The 458 features an eight-cylinder engine sited in the center of the vehicle, behind the front seats, generating 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, like Lamborghini, is owned by Volkswagen, Europe’s biggest carmaker, and Ferrari is part of Fiat SpA.

To be sure, demand from traditional buyers is still tumbling in the U.S., Asia and the Middle East.

Customer waiting times for receiving a Lamborghini model have shrunk to six months from a year, while deliveries in the first half of 2009 dropped by 37 percent.

Bentley Chief Executive Officer Franz-Josef Paefgen predicts that a recovery in the high-end segments won’t come before 2011.

That hasn’t stopped the Crewe, England-based unit of VW showing its new Mulsanne at the Frankfurt fair. The sedan features the "most elegant and luxurious" cabin that Bentley 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."

PROBLEMS FOR PREMIUMS

The premium market, which features cars that cost $115,000 to $220,000, has suffered more than the top-end luxury segment, according to a PricewaterhouseCoopers study published on Sept. 8.

Buyers are turning away from large sedans in the premium class because prices for such vehicles have increased "disproportionately," the consulting firm said. The cost of Daimler AG’s Mercedes-Benz S-class now equals 2 1/2 times a workers’ annual average salary, while in 1975 it was 1 1/2 times the annual paycheck.

"Engine speed and ground acceleration are losing in significance for buyers," said Harald Kayser, head of automotive research at the firm. "There’s a clear trend toward small premium within the premium segment."

A ‘CHEAPER’ ROLLS

Rolls-Royce, the highest-priced brand of Bayerische Motoren Werke AG, is introducing a more utilitarian model aimed at helping the 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, will sell for $339,000, about 60 percent of the Phantom. 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 carmaker based in Goodwood, England, to deliver as many as 2,500 cars by 2010.

Further down the luxury price line, Toyota Motor Corp.’s Lexus brand, which this week presented the LF-Ch compact hybrid concept car in Frankfurt, 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 carmakers can no longer rely on the rich to spend."

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