(FORTUNE Magazine) – There can be only one explanation for all the luxury vehicles on display at this fall's Frankfurt Auto Show: Carmakers took a look at this year's amazing sales figures and lost their minds. True, the numbers are impressive; 1999 is on track to blow past the previous record year for vehicle sales, 1986. And yes, the ongoing popularity of luxury cars has been a major factor in this growth. But that still doesn't entirely account for the one-upmanship at the show, as each carmaker scrambled to be speedier, sportier, and more luxurious than the next--all for a price, of course.

In a grand tented arena, BMW rolled out its production-ready Z8 sports car, armed with stylish retro looks and a 400-horsepower V-8. The cost? More than $120,000. Next came a new version of the M3 sports coupe, radiant in a "metal satin chrome" finish. The grand finale was the Z9 gran turismo prototype--with double gullwing doors, a V-8 diesel engine, and push-button shifting. "We'll introduce 20 new models in the next two years," gloated BMW's CFO, Helmut Panke, over dinner that evening.

Other manufacturers are feeling no less expansive. Jaguar, for instance, unveiled its first-ever Formula 1 car, which will debut in March. Meanwhile, as Porsche touted its new rip-snorting 911 Turbo, all the talk focused on its sport-utility vehicle, due to be shown at Frankfurt next year--a risky move for a small sports carmaker, but one that the company hopes will assure its future. "Up to 40% of U.S. sales will be the SUV," says Porsche chief Wendelin Wiedeking. I ask him if something closer to home, perhaps a sports sedan, might also join the lineup, and he sniffs, "There will never be a sedan." How silly of me. Why build something in character when you can have a mile-high hulk instead?

Mercedes-Benz gets the blue ribbon for extravagance, as it set up a four-story, Disneyesque pavilion to unveil a lineup of fast, new, leather-lined cars. The jaw-dropper of the lot was the AMG S55, a limited edition of the already fancy S-Class. Its optional Bondian amenities include a fold-down laptop with CD-ROM drive, printer, and fax; videoconferencing cameras and mikes; full video and DVD systems; three monitors; Dolby Surround sound; two phone lines; and a refrigerator.

If Mercedes won the conspicuous-consumption derby, however, Volkswagen chairman Ferdinand Piech may have cinched the showmanship title: He greeted the crowds with the logos of his ever-expanding empire--VW, Audi, Bentley, Rolls-Royce, Lamborghini, Bugatti, Seat, Skoda--proudly displayed behind him. In announcing that the company will resume making turbo V-8 engines for the Bentley Arnage in Crewe, England (rival BMW had been building them in Germany), Piech said in German--without a hint of irony--"We can say today with justified pride, the new Bentley Arnage is now British again." As for its own entry into the luxury-car sweepstakes, VW took the wraps off its Concept D luxury sedan. The rounded executive-mobile looked elegant, but how will VW avoid brand-blurring between it and its upscale stable mate, the Audi A8? Gerd Klauss, CEO and president of Volkswagen of America, explained, "The idea is to offer an affordable V12." Which seems almost as much of an oxymoron as...well, as a Porsche SUV.

--Sue Zesiger