Over the past 10 years, the luxury car market has grown consistently, with several brands growing to financial and sales volume peaks in their history.

Yearly Luxury Vehicle Sales (2014-2024) 

*The Graph includes annual sales by Aston Martin, Bentley, Bugatti, Ferrari, Koenigsegg, Lamborghini, McLaren, Pagani, Rolls-Royce, and models above the €150,000 mark from Porsche, Lotus, Maserati, Audi, Mercedes, and BMW.

While in the aftermath of the pandemic, it took only two years for the luxury market to reach and exceed the previous peak reached in 2019, the trend that seems to emerge and that could be confirmed in 2025, considering the volume reported so far by major OEMs is one of gradual slowdown or, in a worst-case scenario, stagnation.

A big factor in this trend could be the radical transformation of the Chinese market. Because, in this growth over the 2010s, the USA has almost always been the largest single-country market for most of these OEMs. However, a close second, and quickly growing (for some even larger than the US), has been China.

Porsche is one of the best examples of this. After a launch in 2001, by 2015 China had become the single largest market for the German automaker and has remained so up until 2023, when, with a 25% share of sales overall, it was overtaken by the USA at 27% (while Porsche still recorded a healthy +3.3% volume growth). And this is part of a larger trend that can be observed across different companies.

A luxury slowdown in China

By looking at regional sales from automakers that shared the data over the past few years, it is evident a gradual slowdown in the Chinese market across the industry.

Luxury Automakers Yearly Share of Sales in the Chinese Market (2021-H1 2025)

Since 2021, the one company that has remained more stable and for which China was never the largest market, as a much larger share of its sales relies on European Markets, with a sizeable one in the US as the largest single market, is Ferrari. Despite this, Ferrari too shows a slight decrease from the 2022 peak. A similar situation is observed for Bentley, for which China sales share remains quite stable, and a more noticeable slowdown is visible only in 2025 so far. It must be noted, however, that while shares for the British companies have remained mostly unchanged until last year, the overall sales figures haven’t. Sales in 2024 for Bentley were 30% lower than in 2022.

In the middle is Aston Martin, for which this decrease has been more evident, from a 29% share of sales in China in 2021 to 20% in 2024 and 2025 so far. The company, though, similar to what has been just said for Bentley, has also experienced a sales slowdown in 2024, and likely in 2025 too, albeit less dramatic than that of its British competitor.

Worse off, in this overview, instead appear Porsche and Lamborghini. With some ups and downs for the first one and consistent growth for the second, their presence in the Asian market has shrank more markedly than for the others. Both companies under the VW umbrella have seen their share of Chinese sales halved over these four and a half years. Porsche went from over 30% in 2021 to just 15% so far in 2025, and Lamborghini over the same period from 11% to just 5%.

Why is this happening?

The Chinese automotive market has not slowed down, but actually kept growing after recovering from the pandemic, reaching 30 million in 2023, exceeding that in 2024, and 2025 seems on track to get even higher.

China Passenger Vehicle Quarterly Sales (2021- H1 2025) 

However, Chinese customers are increasingly buying domestic brands, vehicles, and technology. The introduction of EVs has been the perfect opportunity for the Chinese government to push for a fast change in a market that had been dominated by European automakers up until a few years ago. This came mostly thanks to their performance, quality, and brand equity, all coming from a much longer experience. The most established segments, therefore, were the premium and luxury ones. On the volume side, while foreign OEMs had a consistent share, that was already decreasing earlier due customers' price sensitivity and Chinese OEMs' lower prices.

So when it came to luxury, the introduction of the electric powertrain leveled the playing field in terms of performance, and domestic companies also learned throughout the 90s and 2000s’ joint ventures with which foreign brands entered the Chinese market. Additionally, Chinese brands were better at interpreting their customers' preferences and offering them a new automotive experience focusing much more on software capabilities and convenience features compared to their European counterparts.

Some of the legacy luxury OEMs are actually going back to older solutions like the manual gearbox because their average customer wants that feeling of driving engagement that is lost with increasing automation. Chinese companies instead went in the opposite direction, going all-in on technology and creating a new and highly customizable experience for a customer base that generally has not the same long-standing attachment to combustion engines and the feeling they bring. Thus, it does not have the same expectations of driving performance from a luxury brand, but is actually showing to care more about technology.

*Xiaomi SU7 interior

With significantly cheaper prices, many Chinese OEMs offer an in-vehicle experience that aims at driving performance but also a lot more, while the value proposition of European OEMs offering has likely become somewhat less relevant to the point where even the stronger branding cannot compensate the perceived lack of features and technology.

Can European OEMs turn this around?

The stronger players in the sector are managing to keep stable sales and constantly improving financial results thanks to significant increases in revenues coming from personalisation programs.

This strategy has been working very well for most players involved, led by Ferrari and Lamborghini, but also OEMs in more uncertain conditions, like Aston Martin, have reaped the fruits of this trend improving consistently their average selling prices over the last few years.

A gradual diversification of the product lines with the introduction of fully-electric vehicles that have currently been postponed for most luxury OEMs, could bring back the interest in the Asian market. However, improving success in a single market, however large, might not warrant the substantial investment needed for the development of these models.

The other option could be to gradually shift toward even more exclusive and limited models with a strategy closer to what the likes of Koenigsegg or Pagani have been doing. This would definitely shake the current company structure for these established OEMs, but potentially ensure strong profits with a more limited production that could also shield customers from depreciation that has been plaguing the segment lately, even for limited-run models.

Following up on the first half of the Luxury Automotive Strategy and Marketing online course published a while back, the second half is now available on Udemy at the link HERE.
As for the previous one, this course too is thought for enthusiasts and university students who want to learn more about the workings of the industry. While it is not necessary to have completed the first half to be able to understand and learn this second one, the two are closely linked and form a complete picture.

So, after learning about the key players in the industry and how their branding and strategies compare to each other, this new section looks at market dynamics highlighting the main trends, some academic analysis of them, and an overall view of the global luxury market numbers. Last but not least, a couple of interesting case studies conclude the course comparing diversification strategies and innovation in luxury automotive.

I hope you'll enjoy it. Don't forget to leave feedback and get in touch to know more.

Times of uncertainty and overall luxury market slowdown as highlighted in previous articles have brought difficulties to several brands in the segment. However, regardless of current and recent success or struggles, trends in brand, diversification, and marketing strategies have changed significantly.

Driven by various factors for different brands, whether one calls it a more cautious approach or a focused one, after quite a few years of expansion and diversification, most OEMs in the segment seem to be pulling back on both product and marketing strategies.

Diversification

While quite a few brands in the segment had diversified quite aggressively in the past, some of these strategies have gradually changed. One of the best examples of this is Aston Martin. As discussed in a previous article (Not just Luxury Cars: Aston Martin Diversification Strategy), through the 2010s the British automaker started several partnerships and diverse activities that materialized in several limited products and concepts including the likes of bicycles, speedboats, real estate, and even submarines and aircrafts. The latest of these projects is probably the motorcycle AMB 001 developed along with British motorcycle manufacturer Brough Superior and introduced in 2020 for a limited run of 100 units sold for around £100,000.

*Aston Martin AMB 001

But Aston Martin is not the only one. Some of these activities continue and will most likely continue in the future. The collaboration with video game developers is by now one of the most established strategies in the industry in which every automaker takes part and that has even expanded in the last few years beyond just racing games.

Others however could have been a phase or one-offs to look for new opportunities or business models but seem to have been completely abandoned.

Real estate projects have been relatively popular for a while among luxury automakers, with the likes of Bugatti, Porsche, Pininfarina, and Bentley (as well as the just-mentioned Aston Martin) and more all entering partnerships with high-end developers for residential buildings in selected areas such as Dubai or Miami. These have recently slowed down or almost disappeared.

Similarly, various OEMs have also reduced the release of branded merchandise like Ferrari removing a significant share of everyday objects and accessories, or Bentley not following up on its collaboration with Fanatec for driving simulators steering wheels.

Product trends

On the product side, a key trend that seemed destined to get stronger in the coming years, but that, at least for now, has almost completely stopped is the production of one-offs.

An initiative that in the era of high customisation represented the absolute top of luxury automotive tailoring. Something that Ferrari has been doing for the past 20 years now, and that over the last 8 or 9 has been consistently growing with more OEMs developing similar initiatives year after year. This went on up until 2023, to almost completely stop in 2024.

Yearly One-Off and Few-Off production by Brand (2006-2023)

A similar result would be displayed if few-offs were included. 2024 saw only a few releases and only some were very limited (below 100 units) and presented significant updates compared to the “regular models” like the Lamborghini Huracán STJ released in only 10 units to celebrate the end of the model’s lifecycle.

It is still unclear whether this is just a casual slowdown, while the automakers continue developing their own personalisation programs, but the slowdown is certainly noteworthy.

On the product side, 2025  so far has also seen a substantial slowdown in the release of production models, with only 2 major releases by an established automaker consisting of Aston Martin’s convertible versions of its new Vantage and Vanquish models. This is certainly not only due to strategic changes, as over the last 5-6 years, most established brands released entirely new product lines that in this market tend to last between 5-10 years, sometimes without any significant mid-life refresh. That said, uncertainty with electrification in the luxury segment and other factors have certainly played a role too, and overall the release rate over the first 4 months of 2025 represents an average 71% slowdown compared to the previous 6 years.

Reversing Course on Electrification

As just mentioned this is probably one of the biggest factors of instability in the current market. As the electric vehicle market started developing legacy OEMs and luxury brands started working on the development of luxury EVs. But things did not go according to plan.

Porsche was among the first and its Taycan has been one of the fastest depreciating vehicles on the market reaching a -51% in just 4 years, with over 30% over just one.

Similarly, other OEMs that launched electric supercars or hypercars have struggled to sell out even extremely limited runs. It has been the case for the likes of Pininfarina and Rimac too which has been at the forefront of this transition right from the start. However, since the beginning, even Rimac’s CEO Mate Rimac has been quoted saying that customers in this segment simply do not want full-electric vehicles, which will likely force the brand to introduce hybrid powertrains facilitated by its joint venture with Bugatti. Aston Martin too has currently delayed its first EV.

As traditional strategies have not worked as expected, OEMs had to rethink or expand their plans. Ferrari, set to release the first fully-electric vehicle in 2025, is likely to introduce a unique vision for it as discussed in a previous article (New Luxury Automotive: Going Beyond Performance?).

*Porsche Macan EV

Porsche while still struggling in selling its GT Taycan, despite the mid-cycle refresh which brought several improvements, seems to have found a solution to successfully build its EV portfolio. In 2025, 25.9% of the vehicles sold were EVs, led by the recently introduced Macan EV SUV. Over the first 3 months of the year, the SUV sales grew by 14% to 23,555 units sold. Of these over 60% (14,185) were full-electric ones, confirming a certain appetite for comfortable and sporty family luxury vehicles rather than exclusively performance ones.

This trend is surely going to reflect on the marketing and product strategies of luxury OEMs preserving their strong identity instead of exclusively focusing on what the future holds for the industry, which in turn could also give them competitive advantages against upcoming competitors.

Refocusing on motorsport

Beyond Formula 1 which has been skyrocketing in popularity over the last few years, endurance is certainly getting more attention and become a key marketing tool for most legacy luxury performance brands.

Following Porsche and Ferrari, most other brands followed in rapid succession. Lamborghini announced its LMDh participation with the SC63, Aston Martin confirmed its entrance in the LMH category in 2025 with a racing version of its Valkyrie. Last but not least McLaren too announced they will be participating in the FIA endurance championship from 2027.

Conclusions

Luxury automakers’ marketing and programs' expansion slowed down over the past 1-2 years following difficulties in the industry for several brands driven by a general slowdown in automotive and in the larger luxury sector, along with changing trends in consumer preferences.

Where for a while it seemed like most companies were more and more frequently trying new strategies, these have ultimately been decreasing with automakers refocusing on core values, legacy products, and (when relevant) motorsport.

One exception however is coming from Ferrari. After the pull-back in diversification and the claim of wanting to become “a luxury brand”, a few days ago Chairman John Elkann announced a new project for a Ferrari sailboat coming soon. While the sailing segment is not exempt from crossovers with the luxury automotive one, this seems like it could be a larger project with a bigger commitment that will be discussed in future articles.

Aston Martin is another luxury automaker that has gone through significant changes in a short time. After the IPO, and the difficult pandemic period sales and financial performance suffered a slowdown that resulted in layoffs and the start of its restructuring.

Ownership Structure and Partnerships

The initial step of this process has been the acquisition of a 16.7% stake in the company by the consortium Yew Tree Overseas Limited led by Lawrence Stroll. In subsequent investments, the consortium has brought the share of ownership up to over 26%. A little later, but across more or less the same period another important player entered the picture. Chinese Automaker Group Geely started with a 7.6% stake acquisition in late 2022. The company is naturally well known in Europe by now thanks to its extensive interests with the ownership of legacy brands such as Volvo and Lotus and the creation of new ones like Polestar, already existing but revamped as an EV manufacturer and completely separated by the former parent company Volvo, Lynk & Co, experimenting with new vehicle ownership alternative models, and Zeekr, another EV-only startup that began operations in 2021 and is set to start its first deliveries in Europe in the second half of 2025.

After the initial investment, Geely extended its ownership of the brand to 17% in 2023 becoming the third largest shareholder.

Another important milestone in 2023 for the British automaker is the partnership formed with American EV-maker Lucid. The contract for over $450 million included the supply of electric powertrain components, such as its proprietary high-performance twin motor, and batteries for upcoming electrified vehicles. Following this agreement, however, once again things have not been easy for Aston Martin which, while issuing two separate profit warnings in 2024 due to delays and sales slowdown in China, has also delayed plans for the introduction of its first EV, initially to 2027 and later to 2030.

A sign of relative instability, and probably one that is not encouraging for potential investors, has been the continued change of leadership in a short time. After almost 6 years at the helm of the company, Andy Palmer, right after the arrival of Mr Stroll, was replaced by former AMG CEO Tobias Moers. The new leadership came less than two years later with former Ferrari CEO Amedeo Felisa, who himself remained for just two more years before being substituted by former Bentley CEO Adrian Hallmark.

While some time to properly recover from the pandemic impact was expected, with renewing infrastructure and product portfolio, 2024 was initially quoted as the year the company would have finally become profitable after several years. This has not happened, due to several factors. But what went wrong? And can Aston Martin turn this trend around?

A new direction for the brand

As it has been discussed a few times already in this blog, under the new leadership Aston Martin has refocused its image, communication, and brand strategy on pure performance rather than a more classic ‘British elegance’ and grand touring vehicles.

This vision is ultimately realised in the new vehicle lineup that has been completely renovated over the past five years.

With the 2023 launch of the new DB12 dubbed as “the world’s first super tourer” instead of “just” being a grand tourer, the 12% increase in horsepower and the revised vehicle dynamics Aston Martin brought this vision to life. All the following releases, which over a 2-year period replaced the old lineup, followed suit. The new Vantage’s power has been increased by over 30% over its predecessor, and finally, the new Vanquish which brought back the old formula with the front-engine V12 rather than the mid-engine concept teased in 2019, also delivers important figures with maximum power at 823 hp.

Last but not least, 2025 should finally see the first deliveries of the second mid-engine ever made by the automaker. Born from the collaboration of a few years ago with Red Bull racing, styled by Adrian Newey and Valkyrie’s little sister, the Valhalla.

A second important change that has come with the new lineup is the interior tech update. A common complaint made by modern Aston Martin clients was the outdated tech brought in from 2018 Mercedes models with a previous agreement. Now, all the new vehicles (including the DBX707 which gets the interior update from 2025 on) feature new interiors with greatly improved quality and tech that is up to modern standards but interestingly do not forget the importance of luxury tactile experience. For this reason, Aston Martin did not implement entirely digital control like many competitors have been doing but instead decided to “future-proof” its cars with high-quality physical dials and buttons.

*Aston Martin DB12 interior

The new image for the brand aims to reflect the renewed endeavours in motorsport, with an F1 Team that enters its 5^th season under the new name (previously Racing Point), and the Valkyre making its debut this year in the LMH Endurance division. On the motorsport side, the investments go even further, with a completely new HQ for the racing division and a new wind tunnel for aerodynamics testing which has just become operational.

Aston Martin and the Luxury Automotive Industry in 2024-25

While the new approach taken by the management and the steps made so far have been generally praised by enthusiasts communities and media, the results are, unfortunately, far from positive.

Aston Martin Sales (left) and Revenues & Operating Loss (right) (2020-2024)

In 2024, sales have decreased by 9% compared to the previous year and financial losses have remained mostly similar to 2023. Aston Martin reports difficulties with the supply chain in China as a major factor in this slowdown, and the main reason why it had revised its sales target for the year earlier in 2024 lowering it compared to previous estimates. However, it also highlights an 8% increase in volumes in the last quarter of 2024.

So, are there any positives to draw from these uncertain results?

On closer inspection, one positive, reflecting the continuously increased average selling price that reached £245,000 (€291,000) in 2024, is that despite the 3% drop in revenues, while sales volume went to lower levels than 2021 revenues compared to that same year are 45% higher. This at least signals a healthier sales strategy for a luxury brand.

Also, for the first time in quite a few years, the brand seems finally fully positioned on all fronts to deliver good results with marketing, product line, and infrastructure all aligned with the competition and delivering a unique brand character.

Last but not least, it must be remembered that the global market uncertainty has surely negatively affected Aston Martin’s results as several other brands.

In 2024, for the first time in several years, the global luxury market had a contraction, albeit a small one (1-3%). Automotive remains by far the largest industry in the segment with an overall value of €579 billion despite a 5% volume decline. The impact of negative sales is partially offset by the ongoing trend of increased focus on personalisation and exclusivity which Aston Martin has partially captured with improvements in its customer service and range of options of its Q Division (but that is still led by Ferrari with a total 2024 sales of 13,752 units, just +0.7% over 2023 still resulting in a +11.8% in revenues over the same period).

Where to go from here?

The current markets are harder than ever to ‘read’ or try to assess, with multiple geopolitical factors affecting international relations and various dynamics developing in unpredictable ways. So, assuming potential stability of the current situation, Aston Martin seems in the best position in many years (maybe ever) to deliver some good results in 2025. The competition, however, embodied especially by Ferrari, and partially by Lamborghini, is stronger than ever as well. While other British brands like Bentley and McLaren are also not going through an easy time.

Key to the long-term success of this project will be to limit depreciation that has already hit hard older DBX models (with older models losing around 50% of the value already over 5 years probably also due to the following release of the more powerful version), and is affecting the resale value of more recent DBX707 and even DB12 models. Naturally, this is not an issue hitting Aston Martin alone. But managing to do that would make new models more desirable. Similarly, the success of the Valhalla which has so far received a very positive reception will also ensure a good overall boost to financial results, as other special runs have done over the past two years, partially offsetting the other difficulties the automaker has gone through.

Last but not least, a continued improvement of customer service, personalization offering, and dealership network should remain a priority as it is one of the main factors affecting luxury buyers’ purchase decisions. As the restructuring has taken place and reshaped the company, 2025 could be the year financial results catch up.

The current luxury automotive landscape is shaped by a specific trend that has influenced various players and could increasingly define new products in the near future. In a way, it might even seem like the industry is going backwards. But the truth is that recently something has fundamentally changed in how the value proposition of luxury cars is conceived. And electric cars might be a big part of this.

In the early days of the automotive industry, cars were rare objects for the rich and the daring who wanted to experiment first-hand with this new technology. Cars were not thought for the mass market and were entirely built by hand and highly personalised, at least until the advent of the Ford Model T in the early days of the past century. In Europe in particular the trend of hand-crafted cars and coachbuilders who would specify a body according to the client’s specifications continued for a while. Along with the aesthetics, one of the defining characteristics of cars at the time was performance, and racing was a powerful marketing tool for it.

This is true today as well, but there is more going on. I have already touched previously on how customization is gaining more importance today, and how it has become a significant share of companies earnings (to know more check Tailor-made: What luxury car customers can't go without and One-off Supercars: What’s the next step for luxury automotive? ). In its Q2 2024 report, Ferrari quotes a +16.2% in revenues, and as it happened several times already, among the contributing factors is consistently mentioned increased popularity of personalisation programs, which also allows for the significant margins made on every single vehicle sold. But in the modern industry of supercars and hypercars it is becoming more and more common to see taglines about “the fun of driving” or “driving involvement" rather than the continued comparison of 0-100 km/h (or 0-62 mph) times and top speeds that has been the benchmark of most new performance cars’ headlines for many years.

The trend has been developing for a few years now. Ferrari is a prime and most successful example of this and it is visible in the comparison between revenues and sales figures over the last few years. Right after the pandemic and the quick 2021 recovery, revenue growth remained consistent at almost 20% while sales growth has been gradually limited toward the 15,000 units mark dropping significantly to around 3% in 2023 highlighting the increasing margins made on each model thanks to increasing personalisation demand. 

Ferrari's Sales and Revenues Growth Percentage by Year (2020-2023)

Enjoyment over performance

With the advent of electric performance cars, obliterating normal combustion engine cars in acceleration performance, some initially thought this new technology benchmark would be the driver for the future of the industry. But, at least for now, things are going in a different way.

Despite environmental regulations limiting emissions and engines’ size, which have been the main factors in the growing adoption of turbochargers and superchargers for automakers to keep boosting performance, we are seeing more “going back” to naturally aspirated large high-revving engines. This is naturally, in part, allowed by the fact that environmental restrictions are different for low-volume manufacturers, but hybridisation is one key enabler for this. Supporting electric power allows OEMs to maintain engines that become the centrepiece of a vehicle by offering more involving and immediate response when driving, along with the soundtrack that all collectors love.

The same goes for manual gearboxes. While dual-clutch transmissions and other more daring alternatives (from the likes of Koenigsegg) have reached high levels of refinement with smooth and lightning-quick gear changes, once again OEMs are finding a key selling point in the involvement and driving enjoyment that a manual stick shift offers. While more classics-inspired low-volume automakers like GMA had that single formula right from the start, others are going back to it. Aston Martin recently produced a few limited editions with manual gearboxes. The same goes for Pagani, which not only reintroduced it in its latest Utopia but also made it available for unique iterations of the Huayra. The Italian automaker also claimed that so far over 70% of the very limited Utopia production run has been ordered with a manual gearbox.

*Aston Martin Valour and Pagani Utopia reintroducing manual gearbox

All these trends suggest that as technology has improved and made a leap forward, unlike in the old days, some OEMs have understood that performance numbers can only go so far, and what counted the most at the end of the day for a car owner was the enjoyment and driving involvement, rather than 0.1 seconds less to reach 100 km/h.

Luxury OEMs changing plans

One of the most controversial pieces of news around the topic came a few months ago from an interview with Mate Rimac. The founder and CEO of Rimac Automobili has, in just over 10 years, become the one symbol worldwide for performance automotive electrification as discussed in previous articles on Rimac’s growth and marketing. Its Nevera has become the fastest-accelerating road-legal car in the world to the point where most other top-of-the-line high-performance supercars would seem slow in comparison and has also broken many records. After all this, however, a few months ago, Rimac has been quoted as saying that the future of electric hypercars is uncertain because clients simply do not want them. The reasons for this would apparently, be a refusal to accept a product that is seen as “imposed by politics” with environmental regulations pushing greener vehicles, and a lack of emotional connection with such cars. As mentioned earlier, clients today want more and more something that is unique. Electric vehicles are becoming mainstream, and at the same time instead loud cars with big engines that were already rare are becoming even more so. These would be the key reasons driving clients away from EV supercars and toward a more familiar experience of performance and sound involvement, even if this means inferior performance.

In this context, two companies are taking different but equally interesting action on the matter. On one side, Aston Martin recently announced that they delayed their upcoming EV by at least 1 year (from 2025 to 2026) due to low demand. They instead stuck with big V12 engines and a limited application of hybrid powertrains on the likes of Valkyrie and the upcoming Valhalla.

On the other, Ferrari is trying to “make the EV emotional”, by doing it differently from anyone else. A patent filed by Ferrari a while back shows a unique project for the potential development of an upcoming electric prancing horse.

 Ferrari's EV patent

The plans show how the new EV would feature an e-drive axle and a sound-transmission devise that uses air pressure and vibrations to send sound to the cabin via an acoustic conduit. No electronics or speakers were used to produce sound, making it not just an imitation like some proposed at times, but a proper sound, just likely different. Ferrari would also add resonators on the axles that should amplify the sound coming from the e-motors. Specific valves enabled by an ECU would allow the sound profile and volume to change and adjust in the same way as an active exhaust system opens and closes valves to increase the volume. According to Ferrari, the solution is not devised exclusively for added drama, but also to give drivers a better awareness of what the car is doing at any given time.

Conclusions

The industry seems to have come full-circle since its early days. On the marketing side, personalisation is an increasingly important requirement for clients and OEMs are getting an equally growing share of revenues from customisation programs along with unique limited runs of special editions, or unique models. And like in the early days of the industry, these cars have to be unique to represent the owner's status and identity.

On the other hand, though the technical driving force has changed. Technology for the sake of evolution and performance is being “refused”, with demand steering manufacturers toward larger combustion engines, manual gearboxes, and tactile analogue controls that one might have thought would start disappearing in favour of electric motors, automatic gearboxes (or none at all), and 100% of control integrated into digital infotainment systems. Performance is not as defining as it used to be, while experience both in the car and outside is so more than ever.

The luxury automotive sector showed significant resilience over 2020 as the Covid pandemic broke out. While the wider sector has been faltering in its recovery, the luxury segment kept growing in the following year and in 2022 as well. Along with the general growth though there are other interesting dynamics that can be observed.

Larger volumes

The top-end of the segment, driven by a few extremely successful brands, has registered yet another growth year, increasing over 2021 by about 9%, and a further 3% the next one as displayed in the graph below. The larger automotive sector instead despite a sizeable improvement in 2021, almost stagnated in 2022, with the main cause for delays and bottlenecks still being the shortage of semiconductors.

Luxury Automotive Market Sales Volumes (2018-2022)

The main contributor to this success over the past two years has been the continued growth of brands like Bentley, exceeding 15,000 yearly sales for the first time in its history, Ferrari (13,221), Lamborghini (9,233), and Rolls-Royce (6,021) all posting record results. Other OEMs such as Aston Martin, Porsche, and Maserati (still on the path of recovery) instead have been consistent while probably not exceeding expectations. Finally, more niche brands still going strong like Pagani, Rimac, Koenigsegg, and the likes also contributed albeit with very low numbers. Of the public companies in the segment only McLaren, which has not published its full-year figures (and is accounted for here with an estimate), will likely report a drop in sales since it stood at -13% in Q3 YOY.

Reflecting the general health of the segment is the market size evaluated at €566 billion.

Luxury Automotive Market Value (2018-2022)

Evolving market trends: prices and personalisation

The most interesting data that emerges from these reports though is that while the value of the market has not only recovered but exceeded the record of 2019, sales numbers haven’t.

This is reflected by the growth numbers of various companies in the segment. While for all these the sales numbers have increased, both revenues and operating profits reached much higher growth suggesting an overall improvement in efficiency, and most of all a trend already seen over quite a few years: the general increase of luxury vehicle prices.

2022 Luxury OEMs with the largest revenue and operating profit growths

This increase in average selling price (ASP) takes different forms.

In 2022, Aston Martin boasts a 26% increase in ASP exceeding the £200,000 mark. This has been mainly thanks to the destocking efforts over the past few years.

In other instances, the base price of production models has comparatively increased, either because of new technologies or because they represent new additions to a lineup, as is the case for Ferrari’s SF90 Stradale and Purosangue. The first is priced at £379,000, while the latter specifically substituting the GTC4 Lusso, introduced in 2016 and sold at a price of around £243,000, is offered now at a starting price of £313,000. This trend is observable in pretty much every other luxury car manufacturer, with even more extreme examples in super low-volume ones such as Pagani.

Last but not least, the other important trend that is common to all these companies and represents an important and increasing source of revenue is personalisation. Every luxury OEM over the last 10-15 years has introduced and gradually expanded its bespoke program. Over the last two years, most OEMs quote bespoke and coachbuilding programs as major contributors to the sudden increase in revenues and profits.

The luxury market keeps evolving and, as mentioned previously in the article Tailor-made: What luxury car customers can't go without, the product itself is not sufficient anymore. With general wealth increasing in most developed markets, and a higher number of HNWIs, expectations have become higher too. Clients are looking for more than a high-end car, they want something that is also unique and distinguishable. So, virtually limitless selections of colours, materials, interior, and exterior specifications have been added by every automaker.

The other method used by automakers to cater to this demanding audience is the release of limited-edition models. Often derived in most parts from production cars, limited runs usually feature a few unique additions that can, at times, be only cosmetic. These rare models are more desirable as they also suffer much less from depreciation. The peak of this trend is represented by one-offs which have also been constantly increasing over the past 10+ years as shown in One-off Supercars: What’s the next step for luxury automotive?

*Latest example of limited-run by Aston Martin DBS 770 Ultimate Volante

Additionally, each OEM used different methods to realise efficiencies in production and resource management. Bentley’s ‘Dream Factory’ realised with a £2.5 billion investment significantly reduced water consumption, improved waste management, and overall carbon footprint. Others such as Aston Martin optimised product development processes that allowed them to maximise cross-carline component sharing. In turn this reduced processes and engineering complexity.

Unfortunately, for some OEMs, this also corresponded to significant layoffs over the last two years, which surely contributed to the reported results.

Further Brand diversification

Other important factors contributing to the growth of luxury automotive brands apart from the delivery of new cars, and the ones quoted above, are the pre-owned market and events.

As discussed previously (Luxury Automotive Resale Value and Depreciation: How and Why) the pre-owned market is extremely important for luxury automakers, and not only because low depreciation makes cars more attractive for potential buyers, but also because most new clients when approaching their first purchase chose a used vehicle.

What often happens next is that these clients end up owning more than a single car, in fact over 50% of a large sample of owners claim to possess more than one luxury vehicle. This choice is often strictly tied to branding and brand value, so clients effectively become part of a restricted elite where they also get involved in a plethora of activities that offer OEMs more opportunities to create additional revenue streams.

Bentley's latest announcement on this field is particularly interesting. With its latest program called “Extraordinary Journeys”, the brand offers highly curated road trips in selected locations revolving around the best driving experiences possible while moving through high-end hotels, fine dining, and other interesting cultural activities. While this is something that many brands organise for their clients, what is unique in Bentley’s case is that for the first time, they are opening these programs to non-clients, giving them the opportunity to drive a range of different models during the trip. This is not only a great additional revenue source, but also a smart way to attract new potential buyers and create brand advocates thanks to a proper 360° experience that goes beyond just the product.

Coming Years

Over the coming years, the luxury market has new important opportunities coming from the transition to electrification and with new technologies. SaaS (Software as a Service) creates even more options for personalization throughout the entire customer journey. From early stages to after-sales, OEMs can offer additional services and make their ownership experience even more unique.

*Rolls-Royce Spectre is the first offering a customisable digital cluster according to clients' preference

The segment has been more resilient despite the difficulties the wider sector went through over the past 3 years, and so far signs seem to indicate the positive momentum might continue.

On the occasion of Earth Day, Aston Martin unveiled its new sustainability strategy called Racing.Green. which sets a new benchmark for the company’s next decade.

Over the past few years, Aston Martin too, following the industry trend dictated by increasingly strict environmental regulations, has started implementing various sustainability measures. These measures of course, in the current market, can also become important marketing and communication tools as well.

Aston Martin developing strategy

In 2019, Aston Martin already confirmed the use of 100% renewable energy across all its production plants in the UK. Then, since the start of the pandemic, it has also managed a 44% emissions reduction in the UK.

These of course are steps that are not exclusive to the British automaker but are being implemented by the majority of industry OEMs, especially in terms of industrial plants' energy efficiency and water waste reduction.

The Racing.Green. strategy complements the Project Horizon started under Tobias Moers management. An overarching business plan that covers every area of the business with the aim of making it more efficient, sustainable, and competitive.

Despite the significant evolution of the business, however, Aston Martin went through another difficult quarter in 2021. As highlighted in last week’s analysis the automotive industry was off to a difficult start in this first quarter, but it was not necessarily the case for the luxury segment which has seen some great performers.

The automaker had a slightly improved financial performance driven mostly by a higher average selling price and the first deliveries of the hybrid hypercar Valkyrie, which also led to a 36% increase in gross margin. However, operating loss was higher, as was net debt compared to the end of 2021, and sales were significantly lower than those of Q1 2021. According to Aston Martin, this was mostly due to preparations for the DBX707 production start, and consistent obstacles in the supply chain.

*Aston Martin DBX 707, Source: Aston Martin media

The outlook of the company seems positive from a strategic point of view as order and retail sales remained solid and outpaced wholesales. This indeed indicates a successful (so far) transition process to a different sales model. This shift along with the delivery of special models Valkyrie, and V12 Vantage could markedly change the face of the company throughout 2022.

New Management

Naturally, as already reported, the major news for the British OEM over the past few weeks has been the major change in management.

While the brand itself did not release many comments through its official channels, a piece by the FT reports official comments by Stroll as well as insights from industry insiders.

Allegedly, a drop in staff morale and the resignation of several senior figures due to a “robust management style” led to Moers replacing. So, while the ex AMG was instrumental in the company’s turnaround through 2021, to go forward Stroll wanted “greater collaboration and a more cohesive way of working” as well as someone who “understood and experienced luxury and higher price products”. Hence the choice of ex-Ferrari CEO Amedeo Felisa.

Naturally, this is not the only change in a primary role. Following Felisa is Roberto Fedeli, Technical Director at Ferrari during the same period. New CFO Doug Lafferty and Chief People Officer Simon Smith have been appointed too. Also the commercial team in China, and design, engineering, quality, and sustainability teams have been strengthened.

Racing.Green.

The new sustainability strategy defining Aston Martin’s path over the next decade and well into the next one defines several steps that align the company with UN Sustainable Development Goals.

1. A major project will see Aston Martin install more than 14,000 solar panels at its St Athan site in Wales, capable of delivering 20% of the plant’s annual energy demands.

2. Becoming a member of the Science-Based Targets Initiative (SBTi), a partnership between CDP Worldwide, the United Nations Global Compact, World Resources Institute, and the WWF. This drives businesses' climate action to achieve science-based emission reduction targets.

3. Reaching Net-Zero emission from its industrial plants by 2030 as well as a 30% emission reduction by the same year throughout its supply chain. 2039 instead should see the Net-Zero target achieved across the entire business.

4. Elimination of all plastic waste within three years.

5. Further 15% reduction in water consumption.

6. Innovation and integration with new sustainable materials to expand the offering with options such as green aluminium alloy (entirely manufactured with renewable energy), and vegan leather-like interior materials.

7. A continued push toward electrification, with Valhalla entering production in early 2024, and the first full-electric model coming in 2025. Also, by 2026 every new vehicle will have an electrified option so as to reach a fully electrified (BEV and PHEV) range by 2030.
   *Aston Martin Valhalla, source: Aston Martin media

8. Sustainability is not intended just from an environmental perspective, but also from a social one. A program aimed at improving diversity and equality throughout the company is targeting 25% of all leadership roles to be assigned to women over the next five years.

The new Racing.Green. strategy is crucial for Aston Martin to enter the next era of automotive. Other companies, and especially a close competitor such as Bentley have already advanced sustainability-related business, communication, and marketing strategies. The most important step will be the steady transition to electrification, starting with the introduction of the new generation of mid-engine supercars and the brand’s hybridisation.

The rest of the year will be an important indication of the company’s resilience. In this respect, the new management will also be important. While a second change in just two years might be risky, a seasoned professional who successfully led the most successful brands in the sector. For now, while full of potential, the future of Aston Martin remains uncertain.

The global automotive industry is still going through a difficult period, with sales in the first quarter of 2022 shrinking in each continent. With negative effects stemming from Covid-19 cases still present despite the general media indifference of the last few weeks, supply shortage, especially with semiconductors, and uncertainties with the Russia-Ukraine war, the outlook is still worrying.

March 2022 saw sales in both the US and EU drop by over 20%. Q1 decrease was less severe overall but still reached a significant -10% in both markets (Nasdaq, Statista, Unrae). Asia might partially be an exception. While Reuters reports a 14% drop in sales in Japan in January, according to CAAM, instead, China maintains the positive momentum with a 10% growth in March, and an 8% overall in Q1. Notable is also the sales of NEV doubling in March with around half a million units sold.

Automotive Market growth % in Q1 2022/March 2022 by Region

This again shows the difference between the volume market compared to the high-end luxury one where. As discussed before, and while for some the hardship is not over yet, for “the usual winners” it all seems smooth sailing and more.

Luxury segment: Winners and Losers

The usual 5, Rolls-Royce, Ferrari, Lamborghini, Bentley, and Porsche, manage again to post yet another record quarter or a really strong one at least. In terms of sales, Rolls-Royce and Ferrari top the chart, increasing their respective sales both by 17% and reporting strong financial results as well.

Right after Lamborghini increases its sales by 4.8% and reports positive financial results as well with revenues and operating profits improving by 13 and 25%.

Porsche and Bentley both reported a sales drop of 4.9 and 4.6% but record financial figures signalling an important focus on business efficiency during this uncertain time. Revenues and operating profit at Bentley improved by 41 and a staggering 162%. At Porsche, the same figures grew by 4.1 and 17.4%.

After a positive 2021, with a bold recovery from the previous year, thanks to the introduction of the SUV DBX, Aston Martin seems to be back in troubled waters. Sales decreased by almost 14% with only the GT segment improving, and the DBX sales dropping 41%. Also, despite the revenues increase, financial results are not positive as well.

What’s next?

The continued growth of the segment is probably coming from increasing property prices and the stock market growth of 2020 and 2021. According to property consultants, Knight Frank these unique conditions created over 51,000 new Ultra-high-net-worth individuals (UHNWI), classified as people with at least $30 million of investable capital, bringing the overall number to 610,569.

Top automakers are responding by following the current trend in the industry and expanding their portfolio to cover the widest portion of the market possible.

The one that paved the way over the last two decades and is still pursuing such a strategy is Porsche. Q1 of 2022 confirms the Taycan range as the third best-selling after the two SUVs, but above the 911, which is a key indicator of how more and more people are interested in the sporty luxury automotive experience (and in this case even electric mobility) without being “limited” by the typical sports car’s lack of practicality and everyday usability.

Notably, Ferrari has been doing the same. If it does maintain the growth rate by the end of the year, while still strictly controlling its sales numbers, it will have almost doubled the figure in 9 years, from the 7,000 units of 2013.

Ferrari Sales, Growth Percentage (2013-2021) and Product Range value Proposition

More important than that though, is the portfolio expansion. Since 2013, right after the LaFerrari, the brand added a 4-door line (FF, GTC4 Lusso), that will now be substituted with the SUV Purosangue, a new GT line (Roma), a higher-end, high-performance hybrid (SF90 Stradale). Most recently the new V6 Hybrid, that while dictated, as a choice, by the more restrictive environmental regulations, does not substitute the mid-engine V8 line (at least not yet).

Along with all this Ferrari makes sure to retain also the very top niche of its clientele with the personalisation program and the One-off, discussed more in detail as a trend here. Its latest born the SP48 Unica introduced just a few days ago.

The other brands Rolls-Royce, Lamborghini, and Bentley, as discussed have all very successfully entered the SUV segment, but that is not all. Much like Ferrari and Porsche, they too are nearing the release of additional models that will expand their lineup. For Lamborghini, it will be the full-electric fourth model, which according to what has been said by some representatives it could be more of a GT model. Rolls-Royce too has the full-electric Spectre coming soon. And last but not least, Bentley’s new model which debuts today will sit at the top of the range, expanding the brand’s reach, but not introducing a new electric powertrain.

Other OEMs that are going through difficulties or “losers” (in a figurative way regarding this last period, of course) are adopting similar strategies. But there is more going on behind the scenes for both McLaren and Aston Martin in the search for stability.

McLaren, whose market potential was investigated in the last article’s 5 forces analysis, unexpectedly has not released any report after Q3 of 2021. Its range expansion has consisted so far in the addition of the GT to the range. More importantly, however, there is also an important restructuring.

It is of last week the announcement of the new CEO finally taking place at the head of the British company after Mike Flewitt left its role. Michael Leiters will start in his new position effectively on July 1^st. Before this, he held senior positions at Porsche and has been CTO at Ferrari. This important announcement followed some other major changes in important corporate roles within the company.

There is also the now long-standing rumour about the Audi buyout of McLaren’s F1 team that would at one point involve also the automotive division. The deal was first denied by McLaren in November, but speculations continued as ongoing discussions were not excluded. Despite various media outlets still talking about it, from recent statements by the likes of Zack Brown, it looks like nothing is going to happen (at least in the short term).

Similarly, it is of a few days ago the announcement of Aston Martin’s change of leadership. After just two years, Tobias Moers, the man behind the rise to power of AMG, called by Lawrence Stroll to save the British car manufacturer, will be substituted. While Moers will remain close to the top management of the firm, the role of CEO will go to ex-Ferrari Amedeo Felisa who held the same role in Maranello from 2008 to 2016. With him, another former Ferrari executive, who worked at Alfa Romeo and BMW, Roberto Fedeli will join Aston Martin as the new CTO. Both of them arrive from Chinese Silk-FAW which is attempting to establish a presence in the Italian motor valley to produce electric performance cars.

*Amedeo Felisa and Roberto Fedeli

Aston Martin too has a significant product expansion planned, but its recent difficulties have left it behind the competition. Especially in the transition to hybridisation and electrification. The mid-engines Valkyrie and Valhalla have already been significantly delayed. In an interview with the Guardian, Stroll himself said that Moers’s contribution was key to restructuring the company in a critical moment. Now, someone else is needed to bring it to the next stage. While all the people involved are certainly capable, and extremely experienced professionals, only time will tell if these fast changes in management will have the positive effect Mr. Stroll is hoping for. Aston Martin went through the rough destocking phase, and out of it had a good 2021. The financial risks however are not over, and this first quarter does not look promising.

Between restructuring and vast portfolio expansions, the luxury segment continues its overall growth while the rest of the industry falters. Despite the global increase of HNWIs, one wonders if all the contributing factors that caused such a severe contraction of the automotive sector in 2022 will eventually affect the luxury segment as well. For now, a few companies are setting the trend and look very much in control of the narrative and the direction of the market.

In 2021 Aston Martin reported strong sales, close again to its 2018 all-time high (just 4% less) almost doubling its 2020 figures. Financial performance too shows positive signs. Despite being still far from that of some of its competitors, every improving metric demonstrates the results of a clear vision for the future of the company that so far has delivered on many promises.

Naturally, the OEM is still not out of the woods completely. 2022 and the next few years will be crucial to proving its strategy and product line’s resilience. Special focus will be on the SUV segment which has been one of the pillars of this strong recovery, and on the electrification strategy, on which Aston Martin is still slightly behind its competitors as of now.

However, the new team and management at Aston Martin are no slouch, and important steps have been taken to reinforce the company position in these respects. So let’s see how the automaker is preparing to face this decade of transformation and big challenges, and also what kind of competition it is going to face.

Project Horizon

Project Horizon is the path set by Aston Martin and announced by new CEO Tobias Moers, which much like the Cor Tauri plan for Lamborghini, defines the company’s short to mid-term future.

Considering the unique period in the industry, the new strategic plan includes multiple steps in various directions.

1. SUV

The first is, of course, the SUV development. As mentioned, 2021 was a good year for Aston Martin which delivered 3,001 DBXs capturing almost 20% of the luxury SUV segment.

Luxury SUV market share by Company in 2021

*Percentages are likely to be slightly lower as Porsche is not included in this graph, but out of its 83,071 Cayenne sold, the Turbo S E-Hybrid, Turbo S E-Hybrid Coupé, and Turbo GT have pricing that is comparable to those of the models accounted for in the graph.

As mentioned, the continued positive performance of the SUV model will be extremely important for Aston Martin, and to that end, the company has already realised two variants that enrich the range and offer a better market coverage. The mild-hybrid DBX Straight Six, offered only in China (perhaps to better cope with import regulations for ICE vehicles), and the performance-focused DBX 707, quoted right now as the most powerful SUV on the market.

So, the timing is also quite perfect for the latter. DBX 707 has been released in advance of an incoming strong competition in the form of the Ferrari Purosangue, and updated, more powerful Lamborghini Urus EVO, which gives it a significant opportunity over 2022 to grab a larger share of the market for top performance SUVs.

2. Entry in another new segment

The second aspect of the strategy is the renewal of the other models in the line-up. The most important step is the introduction o three new mid-engine models which effectively introduce Aston Martin to a completely new segment as well.

Deliveries of the hypercar Valkyrie have started at the end of 2021, and Mr. Moers claimed deliveries of the Valhalla will begin by 2024. To these will follow also the new Vanquish, presented as a concept in 2019 at Geneva Motor Show, which will fit in the line-up as a lower-tier sports car below the more powerful Valhalla.

The third model like the first two will be a hybrid. And last but not least, there will also be the Valkyrie AMR Pro, a track-only version of the hypercar with even more extreme characteristics.

3. Remaining models update and limited editions

The other models which are, and have been for years now, the core products of Aston Martin’s line-up will also receive updates and gradually hybridised. Most of all, thanks to the renewed deal with Mercedes-Benz they will get updated, cutting-edge interior technology.

These will also be complemented by more limited editions. For instance, over the last year and a half, to also celebrate the entry in Formula 1, and the deal for the use of Vantage and DBX as Championship safety cars, the Vantage has been released in two distinct limited editions inspired by this new experience. The F1 Edition, and the V12. Along with these series, more Continuation models will be produced as well, continuing the trend of increasing personalised, rare, and exclusive luxury and sports cars.

4. Improved Customer Journey

As discussed in a previous article, the customer journey in today's market is almost as important as the product itself. And this is especially true in the luxury segment. So, this has been one of Aston Martin's main focus within the Project Horizon Strategy.

One of the most important improvements has been the release of a new car configurator. The new software offers a seamless, more flexible, and enjoyable experience. Thanks to constantly improving 3d graphic engines, the new configurators offer a more immersive and realistic visual experience, as well as the possibility to create both images and video content of the model as specified in the software.

5. New Skill

This forward-looking momentum, also meant that Aston Martin had to hire new people to bring in the expertise necessary for electric powertrain development, software, and other related skills.

6. Improved resilience and efficiency

First of all, in March 2021, the OEM completed its destocking. A key step to move forward in its change to a build-to-order business model.

Secondly, Aston Martin is looking to strengthen its presence in Asia and in the US which are both sizeably smaller than the EMEA region in terms of sales.

The other area for improvement targeted is the efficiency in various steps of the production process. From reduced waste in the paint shop to a consolidation of the production lines in the Gaydon plant. The combination of these different factors resulted in a 20% reduction in manufacturing cost per unit.

These measures are complemented by a renewed ESG (Environmental, Social, Governance) strategy. In particular, the commitment to reduced emissions and carbon footprint according to the Science-Based Targets initiative (SBTi), to eventually reach its Net-Zero Standard.

7. Lagonda

Yes, plans have changed also for the second brand owned by Aston Martin. The Lagonda brand initially set to be revived during the Palmer leadership, will not be developed as an independent one. This decision will serve to bring more efficiency to the business as well, focusing on the sole Aston Martin brand.

However, the Lagonda badge will not be completely abandoned. It will likely be featured in future luxury-oriented models, delivering a function similar to that of the Maybach brand for Mercedes.

What about the competition?

Aston Martin has set optimistic targets for its 2022. After an 82% sales increase, and £137.9 million adjusted EBITDA in 2021, the automaker expects to further improve sales by 8% and EBITDA by 50% this year. According to plans, the latter should reach £500 million by 2024/2025.

In the short term, the biggest challenges will likely be the competition in the SUV market and the product line electrification.

The luxury SUV market has been consistently growing in these years, and the pandemic did not significantly impact the numbers. But the competition is increasing and automakers are starting to diversify significantly within the segment, with Porsche leading the way in this sense.

Current Luxury SUV market by Automaker

Strategically speaking though, Aston Martin seems well-positioned. Having quickly released both the DBX 707 and the Straight Six soon after the base model has certainly given the OEM a competitive advantage over part of the competition.

As for the electrification process instead, the situation is quite difficult to judge and impossible to predict. There are many factors at play, and most of the manufacturers in this segment are only starting to approach the change. Porsche once again ahead is about to introduce its third full-electric model, the Macan, its best-selling model of 2021. If the trend follows the success of the Taycan and Taycan Cross Turismo, the new EV could become a best-seller very soon as well.

Current Luxury Hybrid and EV market by Automaker

All the other competitors have similar deadlines for the next hybrid or full-electric models, albeit most of them with significantly different approaches or implementation strategies. This time too Aston Martin benefitted from its ties with Mercedes that provided the engine for the hybrid DBX Straight six, proving once more how this partnership could be a crucial factor for the success of the company in the future.

2021 just ended and several companies in the luxury space have been publishing news reporting record sales this year. In many sectors, a significant recovery from 2020’s crisis caused by the pandemic was expected, but few foresaw results exceeding or even equalling 2019’s ones. The average predictions claimed that the full recovery up to 2019 levels would be likely reached only by 2023.

It is early to talk about financial results since the complete annual reports will be published in a month or so from now. However, Q3 reports can already tell a lot, and the results indicate two important facts. One is the difference between the top-end of the luxury market and the lower segments. The second is that forecasts should always be considered with extreme care.

Luxury Automotive Revenue Percentage Change by Company (Q3 2019 Vs Q3 2021)

Automotive Revenue Percentage Change by Company (Q3 2019 Vs Q3 2021)

The main reasons for the difficulties of high-volume car manufacturers are the uncertainty brought by the latest wave of the virus that impacted the market especially in the second half of the year, and the ongoing chip shortage that severely affected the supply chain and cars delivery to dealers and clients. The latter is discussed in more detail in Chip Shortage in Luxury Automotive: The Perfect Storm.

In Europe, in fact, over the 12 months of 2021, 11,774,885 vehicles were sold (UNRAE), a decrease of 1.5% over 2020 and 25.5 over 2019. The five major European markets, France, Germany, Italy, Spain, and the UK were mostly stable (with the exception of Germany that despite remaining the largest market lost 10%). The other important piece of data was the continued growth of BEV and PHEV. In France, Germany, Italy, Spain, and UK the increase in sales over 2020 was 64%, 72%, 128%, 66%, and 76% respectively. Even if starting from low numbers, the increase in just one year is quite significant.

5 Major European Market Total and Electrified Vehicles sales (2020-2021)

So, what has made this year so different for luxury automakers?

Record Results

Quite a few companies at the top of the automotive luxury market announced their 2021 sales figures, and almost all were record-breaking. The last has been Rolls-Royce with 5,586 units, a 49% increase over last year. A few days before the British OEM, other announcements came from Bentley which sold 14,659 cars, up 31%, Lamborghini 8,405, +13%, and Porsche 301,915, +11%. Last but not least, Aston Martin also delivered 6,182 vehicles, thanks to a strong contribution of the new SUV DBX, for a total 82% improvement over 2020. While this is not a record result, it is still a strong improvement over 2020, and very close to the all-time high of 6,441 units of 2018.

How the luxury market reached record sales

There are several factors that distinguish the luxury segment from the rest of the automotive industry, most of which, in this case, were crucial to its success in 2021.

Semiconductors availability

Again the production volume plays a role in the resilience of luxury automakers in the current situation. With most of the companies producing in volumes below the 10,000 units, the chip shortage would arguably be more manageable than for companies producing in the hundreds of thousands or even millions of cars.

Additionally, companies that are part of a larger group benefit from the vast resources of their parent companies. Is the case of those under the VW umbrella, or Rolls-Royce with BMW. CEO Torsten Müller-Ötvös told Bloomberg:

“I’m very glad that we are part of the BMW Group. We had preferential delivery of semiconductors last year”

This allowed the company to fulfil every order in the book without delays and actually sustain a strong order book for this year as well.

*Aston Martin DBX

Pandemic Indirect Effects

With regards to the record-breaking sales of Rolls-Royce, the CEO again interviewed, this time by Reuters, suggested that when Covid hit, travel restrictions followed leaving a lot of unspent disposable income. According to him a significant part of it has been spent on luxury goods.

Also, these past two years, surely made private vehicles the preferable choice over public ones for moving and even going on longer trips.

New models and hot segments

Each one of these manufacturers achieved the result thanks to one or two great performers. For low-volume manufacturers a single model can be a true game-changer, impacting the overall results much more than what a single model can do in the high-volume market. SUVs, once again,  were key in this context. Aston Martin is a good example. Its DBX, up until Q3 accounted for more than half of the overall sales. Lamborghini is too. In 2021, the Urus sales made up 60% of the total, with the Aventador slowing down again and the Huracán improving for the first time in three years thanks mostly to its new iteration, the STO.

Porsche improved also thanks to the success of its full-electric range. Another important trend, as mentioned in the beginning, is just starting now and it is set to accelerate in the coming years. Taycan and Taycan Cross-Turismo sold extremely well reaching 41,296 units, which made it the third most successful product range for the company, right below the two SUVs Macan and Cayenne, but above Panamera, 911, and 718. Porsche’s competitive advantage in the electric space could become even more important in the next years.

For Rolls-Royce instead, the new Ghost, and the release of its Black Badge version, contributed significantly to the record figure, along with the still successful Cullinan.

*Rolls-Royce Black Badge Ghost

A report from IEA claims that in 2021, SUV sales accounted for 45.9% of the total, reaching 35.5 million units globally. Clearly, the top-end luxury segment is still satisfying a strong and increasing demand. As proven by the numbers, most of the recent success and proper turnarounds, of luxury automakers are owed to the extreme popularity of this category, and the relevance of a single successful model in a relatively small product range produced in low volumes.

*Source: IEA

Environmental factors

An important role in the recovery of the luxury market in 2021 has been played by China, whose economy has grown by 8.1% this year, despite the challenges, and exceeding the 6% forecast established by the government.

Interestingly, the country had a major role during the 2008 global financial crisis as well. As the countries that were affected the most gradually recovered, a fast-growing China helped many companies offset the losses in other markets. This dynamic was reflected in the luxury market too of course.

All the automakers that reported great results in 2021 experienced significant growth in China. For some in particular, such as Bentley and Porsche (as visible in the Financials section) the APAC region is already the most important in terms of sales. So, a strong economy, paired with a significant concentration of high-net-worth individuals has been key, positively impacting their performance.

Considering the reports published in Q3, extremely positive results can be expected by the other competitors within the segment.

The factors that played a role last year will arguably continue to influence the market in 2022, but the electric transition will also play an increasingly important role. Like the SUV has helped drive many of these companies’ sales to new heights, the next turning point will likely be the introduction of electric vehicles and the capacity of the OEMs to connect their brand with the new automotive industry and a changing audience.

Bentley Motors announced a few days ago the development of its latest project. A 60-stories building co-developed with American developer Dezer to offer a Bentley branded residence experience featuring lots of amenities. Among these, probably the most striking is the so-called ‘Dezervator’, an elevator that will allow owners to bring up with them up to 4 vehicles and park them alongside their apartment.

*Source:Bentley Media - Bentley Branded Residence

This solution was already featured, a while back, in the Porsche Design Tower, developed once again by Dezer with the German automaker.

Bentley in fact is just the last one of a fast-growing list of luxury automakers and luxury brands approaching this market. Before the British marque, similar developments have been started, or are already in the pipeline for Aston Martin, Bugatti, Mercedes, Pininfarina, Porsche, and Tonino Lamborghini(at least in a way related to the automaker).

Branded Residences have been a growing trend in the luxury industry for a while now. It is gradually expanding to lower segments of the market too. But while the vast majority of these projects is still handled by Hoteliers (Marriott being the largest), automakers now constitute a consistent share of this niche.

But how does it work and why would a low-volume automaker develop and sell or rent a super-luxury residence?

A MARKET OVERVIEW

The competition in the top-end of the luxury market is becoming fiercer. Along with automotive manufacturers, also fashion brands are approaching it. So, for anyone interested you could also decide to buy, or book a long-stay in an Armani Residence in Dubai, or a Missoni one in Miami.

Clients in the niche are becoming more and more demanding. A high level of customer service is expected,so brands have to constantly come up with new, innovative, and unique solutions to lure the attention of their selected clientele.

*Source:Savills 

Required services might vary from more basic ones like mail and package delivery, restaurant, spa and salon reservations, golf courts, 24/7 security, various loyalty scheme, and Concierge services, to on-demand like housekeeping, laundry services, in-home dining service, personal shopping, personal trainer, spa treatments, childcare services, pet services, meeting room services/office equipment, use of the guest suite. From there, pretty much anything is possible and it represents an added value for the clients. Yacht Marinas, Art Galleries, Shops, Meditation rooms, Movie theatres.  Prices vary from $1 million up to around $50.

According to Savills three are the main locations in terms of Branded Residences available schemes. Miami, Dubai, and New York. Asian Cities are instead the fastest growing. On top Hangzhou, Guangzhou in China, and Seoul in South Korea with a projected growth of 189%, 180%, and 78% over the next 5 years respectively.

Additionally, while right now the Automotive marques share of this market is around 5%, this is set to grow up to 24% by 2025, second, as a non-hotel brand, to fashion ones at 28%.

AUTOMAKERS COMPETITION AND OBJECTIVES

On the one hand, this is an interesting diversification solution in a market that is steadily growing and is relatively new. On the other hand, some risks must be taken into account.

The branding of these buildings is usually licensed by the marques to the developers, and later the owners will also pay some fees on it. Other earnings can come from design work and technical consultancy. So, while this represents an additional stream of revenues, there might be risks connected with brand image. The reduced control over the property management might affect negatively the company’s name if the services or facilities are not considered up to standard.

If money is invested too in a different type of contract the risk might increase. This is in fact a very competitive niche and with a small customer base. Luckily, at this end of the market, with the asked price in the tens of millions, the possibilities are almost endless. So, luxury automakers and their partners have to rely on features and services that other brands outside the automotive niche cannot, or would not think about.

*Source:Aston Martin Residences - Aston Martin Residence Penthouse Floor plan

First of all, the design can be daring and become a stand-out characteristic when it is related to a supercar manufacturer more than a regular hotelier. As for special features, the car elevator paired with the sky garage is one. But probably the most emblematic is Aston Martin’s $50 million penthouse that includes in the deal a 1 of 24 track-only Vulcan plus track driving lessons and a membership to a private track club. This kind of deal along with the experience itself offers proper access to the brand’s life and promises a continued experience in time.

Some projects have a different drive. It is the case of Pininfarina. As discussed in the review of the automotive coachbuilding sector, throughout the years as the bespoke automotive production faltered, brands like Pininfarina have expanded becoming full-fledged design houses. In this case, the architectural design, as well as the sustainability principles applied are fully coherent with the brand’s portfolio and new image.

*Aston Martin Vulcan

CONCLUDING THOUGHTS

All in all, this market offers clients the opportunity of buying a property that includes every amenity and service imaginable, but at the same time also becomes part of a brand and its lifestyle. And this was probably the main driver for the entry of automotive and fashion (and other non-hotel) firms in this space.

This niche is new, so there might be doubts about its long-term resilience when it comes to properties that command such huge premiums, especially after this difficult year. Nonetheless, branded residences can become an important marketing tool for luxury automakers. They can help to further increase the marque’s exclusivity factor, promote their values, such as sustainability in the case of Bentley through design, materials, and innovation, and create a closer relationship with the clients inspiring brand loyalty.

Over the last two years, Aston Martin underwent a difficult period and a deep restructuring. Lawrence Stroll, its new Executive Chairman completed a £500 million deal with his consortium, acquiring 16.7% of the company with £182 million and injecting £318 in a new rights issue. A crucial component of this reorganisation is the shift to a production-to-order (or make-to-order) business model. In the words of its former CEO Andy Palmer, Aston Martin aims at becoming the 'British Ferrari' (Autocar).

This is extremely important as it will likely translate into a clear departure from the previous plans for the company. In 2018, which represented a record year for Aston Martin with 6,441 units sold, the medium-term plan was to scale up production to about 14,000 units per year. The new direction for the business will presumably reduce this number significantly, even with high sales expected for the DBX. Let's have a look at what changes the company is going through in terms of the marketing mix and brand strategy.

METHOD

Once again, the framework used is the Marketing Mix 8Ps employed in my previous marketing mix analysis of Ferrari. To check the details about the method used here follow this link: Ferrari Marketing Mix: The Prancing Horse's 8Ps

PRODUCT

The current Aston Martin range is composed of three core products that are also part of the company's heritage, something that cannot be missing in it. Vantage, DB11 and DBS Superleggera. Along with these come two unprecedented additions, born from the new strategy and from an evolving automotive industry where low-volume manufacturers expand their market coverage establishing themselves in other segments. An SUV and a mid-engine product line.

The DBX follows the current trend of the market, but differently from its main competitors, Aston Martin does not have the backing of a larger automotive group. Thus, the platform for this car has been developed completely from scratch, and according to the company, for this reason, it will ensure a unique driving experience that others cannot match.

The mid-engine cars come from the previous partnership with Red Bull Racing established in 2016. Its advanced technology department collaborated with Aston Martin to create a complete line of hybrid rear mid-engine cars, starting with the highly limited Valkyrie (150 units), and Valhalla (500 units). To these should follow the mid-engine Vanquish Vision that was presented at Geneva International Auto Show in 2019 as a concept, and will be a production model.

*Aston Martin Valhalla is already included in the graph while not being delivered yet. It will likely go on sale in late 2021.

Its entire line of mid-engine cars goes straight into the competition with Ferrari's, Lamborghini's, and McLaren's core businesses. These models though, along with the brand that is being heavily revamped, will also bring the signature of star Formula 1 engineer and aerodynamicist Adrian Newey. His contribution led to countless victories in the sport, and he is considered to be one of the best ever to work in it. This factor alone contributed massively to the expectations for these cars.

The two most important attributes for an Aston Martin product have to be Brand and Design. An Aston Martin is and has to be immediately recognisable by its unparalleled elegance and design features, such as the front grid. Also, as reported in the survey I carried out, featured in the article Not Just Luxury Cars: Aston Martin Diversification Strategy, Aston Martin scored particularly high (8.1) when it comes to brand importance in the purchase decision. On a 1-10 scale, outscored all of its competitors, except for Ferrari by a mere 0.1. This indicates an extremely important brand name to be preserved as a crucial component of its marketing mix.

*Aston Martin Design Evolution and consistency. From the Left: 1958 DB4, 2003 DB7 Zagato, 2018 DBS Superleggera, 2023 Vanquish Vision Concept - Photos, except Vanquish Vision, byAston Martin Media

All the core Aston Martin models have been positioned as a perfect mix of elegance and comfort while still offering thrilling performance. In the middle between more luxury-oriented automakers like Bentley, and pure performance-oriented ones like McLaren. Valkyrie, Valhalla, and Vanquish should significantly change that.

Regarding the features, while having lagged behind some other automakers due to the deal that allowed Aston Martin to install only previous generation Mercedes technology in their car, the renewed collaboration should solve this issue too. With the new Partnership detailed here, Aston Martin will have access to the latest technologies offered by the German automaker which is currently one of the leaders in the industry.

PRICE

The price positioning is at the top-end of the market. It ranges from £125,500 of the Vantage up to £247,500 for the DBS Superleggera Volante. DBX starts at £162,125. The hypercar Valkyrie will be well over £2 million, while the Valhalla should be around £1 million.

All of these starting prices might vary massively once options and personalisation by specialised division Aston Martin Q are applied. These can go easily over an additional £100,000.

*A relatively lightly equipped DBS Superleggera Volante reaching £265,805 after options

Value retention is a crucial component of this market for collectors, investors, and the brand itself. This is in fact, a big factor in the company's decision to change its business model. In the past years, Aston Martin cars suffered from steep depreciation. 2005/6 Vantage can be found on the market for a little over £30,000.

Thus, a big effort by the company in 2020, went into destocking. And limiting the offer with the ‘Ferrari-like' production-to-order model should grant a minor depreciation of pre-owned cars in the future preserving the brand exclusivity too at the same time.    

PLACE

As of 2020, Aston Martin sells cars through a network of 168 dealers, with a significant increase in Asia, and particularly China with new locations in Kunming, Foshan, Shanghai, Shenzhen, and Xi'an.

The network is operated through franchises, which enables strong control over brand positioning and limits investments.

Also, like in the previous analysis, Aston Martin dealers are located in specific areas with a higher density of high-net-worth individuals or other luxury car dealerships.

*Aston Martin and other dealers locations in two areas of London.

The pandemic in 2020 deeply affected the dealers' operations. Globally there were many closures and the network had to adapt putting in place health and safety measures for staff and clients. This also brought an acceleration on the development of remote points of contact, with increased services digitization and online engagement. These processes will be maintained in the future offering the option of online or face-to-face service.

PROMOTION

Aston Martin's restructuring and new strategy modified radically its promotion channels as well.

Traditionally, the pillars of its strategy are motorsport, events, alternative projects, and movies. Over the last decade and especially in the last year, the range of activities and channels has been expanding significantly.

Like other automakers in the space, Aston Martin was born, in 1913, from a racing heritage. Despite the focus on sports car production, one of its founders, Lionel Martin, actively participated in hill climb races. Over the decades its racing heritage was firmly established. Since the 50s, the marque has successfully participated in endurance championships such as the Le Mans 24 Hours. In the 2000s, after a long stop, it returned to the endurance competitions such as the FIA WEC. This has since become part of Aston Martin's image in luxury automotive, and an important promotion platform.

After many successes, in 2021, the new executive decided to partially leave the WEC activities to re-enter Formula 1. This has been a massive move, in which Lawrence Stroll, rebranded his Formula 1 team Racing point as Aston Martin Cognizant Formula 1 Team, bringing effectively the marque back to the motorsport top series after 60 years. Along with this, the team brought in one of the most successful F1 drivers of all time, Sebastian Vettel, which in fact, being a very influential personality in motorsport has already been featured in the latest beautiful ad online for the DBX. And thanks to the newly established partnership, Vantage and DBX also became Formula 1 official safety cars during the Grand Prix. This campaign brought massive results, and the team reveal was by far the most anticipated of the season, with huge coverage on every channel. Most importantly, it brings Aston Martin closer to what, so far, only Ferrari and McLaren could boast in terms of Motorsport activities and promotion channels.

Additionally, it is known that Aston Martin has expressed its interest in entering with Valkyrie, in 2023, the new FIA WEC LM Hypercar series, which is another championship that promises to attract a lot of attention.

*Photos byAston Martin Media

With regards to the events, Aston Martin offers a range of experiences to both clients and enthusiasts. From the Art of Life lifestyle program, bringing guests through road trips in special locations, to bespoke events for groups, to the AMR Drivers' Club started in 2019. A program of track days offering both clients and enthusiasts driving experiences on famous racing tracks with cars from the fleet available or private ones.

Aside from its core business, Aston Martin undertakes a range of innovative and unexpected projects. Bicycle, boats, real estate, and more, detailed HERE, which contribute to expanding the brand's reach and reputation.

The fourth channel I mentioned was the Movie industry. Because, while many luxury automotive brands today and in the past have been featured in movies and television shows, no one enjoys an almost exclusive presence in one of the most successful franchises in Cinema. Aston Martin is, in fact, 007 car of choice. And the next James Bond movie ‘No Time to Die', now delayed multiple times due to the pandemic, will be no exception with four different Aston Martin models featured in it.

Of course, along come also a wide offering of fashion and lifestyle apparel and items developed in partnership with luxury brands.

Finally, tying in with all the previous points, the company enjoys a strong and distinctive online presenceon all the major platforms, with the F1 entry giving it a further boost. To this, must be added the models and new unveilings coverage by reviewers and influencers in the automotive space. One above all, Mr. JWW, a successful YouTuber and entrepreneur that in partnership with the brand developed a bespoke highly personalised line of DBX.

Over the summer, to take advantage of the fast-growing E-Sports sector, Aston Martin participated with its team in official competitions, and from 2021 it will have one as well in the F1 E-Sports Championship.

PARTICIPANTS

Participants are involved on multiple levels through the customer journey that, as dictated by modern standards in the industry becomes increasingly diversified and complex.

From the order to the specification and personalisation through Aston Martin specialised division Q, of after-sales services and brand experiences. These points of contact will likely be expanded too, via online services. The automaker already has a range of apps for clients and enthusiasts to configure a car and gather other useful information. But right now, solutions bringing together clients as a family and closer to the brand through new seamless services to improve loyalty are more and more common. So a specialised app for owners can be expected as well.

PHYSICAL EVIDENCE

Aston Martin's online presence, overall brand appearance, and physical locations all convey a consistent messageand pretty much the same feeling one gets while sitting in a real car. A sense of proper refinement and luxury. As specified by the company, this is maintained through strict control over their dealers' management. The spaces themselves are proper ateliers where clients can specify their cars' options down the tiniest detail. A similar look & feel is brought also in stores and shops selling branded merchandise.

PROCESS

The process can vary a lot depending on the involvement of each individual. As reviewed before, all the services are increasingly personalised and the improvement in digital technology will probably strengthen them. On-demand content delivered to potential clients will be more common.

Also, Aston Martin's new production-to-order approach, intrinsically means that the overall process will become more personal and involving for each car produced, further improving brand loyalty and reputation. This process, anyway, has just started so there are time and space for new solutions.

PERSONALISATION

This is the one characteristics around which revolves most of the modern innovations and refinement in this industry.

Aston Martin Q division announced in 2012 (its name inspired by the 007 series), has recently been updated with two different programs.

The first is Aston Martin Collection. A service that offers a range of pre-designed components to enrich a model. The second, Aston Martin Commission instead gives access to the virtually unlimited options offered to clients and a close collaboration with the specialised team. Materials, colours, finishes, graphic details, internal components, and more.

Along with these, Aston Martin produces a number of limited series dedicated to specialised events and anniversaries, the last of which is the Aston Martin Wings series inspired by the connection with the Royal Air Force. Its three industrial plants, in fact, are located on the former RAF bases.

*Aston Martin Victor. Photos byAston Martin Media

Last but not least, going with bespoke high luxury, is the One-Off Luxury car development trend. The Prototype Operations program that gave birth to the Aston Martin Victor could bring new one-off models more regularly in the future. This represents the absolute peak of luxury personalisation, with clients working closely with the brand's designers and engineers to develop a unique car.

There is still much that has come to fruition in this renewed business. The DBX potential success, the F1 campaign, the new models, and other projects such as electrified cars. All in all, anyway, Aston Martin has laid the foundations for a successful new decade and a competition stronger than ever. For sure, all this makes it one of the most exciting companies to follow right now.

The automotive industry sales have been decreasing for 3 years now. The drop in fact has begun in 2018, way before the impact of Covid-19, mainly due to stagnation in the Chinese market. The same cannot be said for the luxury automotive segment though. Both 2018, and 2019 were positive years for the sector overall, and in 2020 despite the virus, it experienced a minor drop compared to the mass market.

*Mass market data source:OICA
*Luxury market data include Aston Martin, Bentley, Bugatti, Ferrari, Lamborghini, McLaren, Rolls Royce, Porsche (including only sales figures of 911 and limited series). Source: Annual Reports

With a sector in good health and several new millionaires every year the sales figures of luxury cars have grown. But this brings two relevant consequences.

First, it is crucial for manufacturers to maintain highly controlled numbers in order to preserve brand exclusivity. Second, “regular” luxury is not sufficient anymore. A while back, I touched on how the Customer Journey has become a necessary component of pretty much any luxury good, and this is especially true when it comes to luxury cars.

But along with extremely detailed customer services, there is another dynamic developing in the industry. Tailor-made one-off or few-off supercars.

Luxury car manufacturers are raising the bar with an increasing release frequency of these exclusive models. This time though, it is not about having the best performance of all (considering that all these cars are already capable of extreme performances) or being personalised in a unique way. This time there is more, and it is, as of now, the highest level of service imaginable by a luxury automaker.

In the early days of the automotive industry, it was common for wealthy clients to have a vehicle especially made for them by an OEM. Then it came mass production with concepts like economies of scale, so everything changed.

Now, instead, oftentimes luxury appears almost “too common” and having a car specified in a very original and creative way is not quite enough for some clients. So, luxury car companies are implementing programs and improving their capabilities, to take their clients on an even more unique journey by working together to design and manufacture their very own car.

*Includes only one-off or few-off projects developed working closely with clients or projects that started a similar wider program

THE TREND

From the graph above it is evident how Ferrari has been developing unique models for their clients for a while. From the first P4/5, it followed the 2008 SP1, with the name indicating the first model of the Ferrari Special Projects or Portfolio Coachbuilding Program. The Program has been started to bring back the experience of old days coachbuilding.

It is not surprising to see Ferrari being the first to embrace this kind of strategy. Not only they are one of the oldest companies in the space, but they have also been developing an extremely complex marketing mix whose example is being followed by other automakers in various instances.

The second trend observable in the graph is the overall increasing number of one-off or few-off projects. Much like bespoke personalisation programs, in the last decade, many companies claimed the intention to introduce their own highly bespoke division to produce unique models regularly.

*In order Ferrari SP1, Ferrari SP38, Ferrari Omologata, Pagani Zonda Zun, Bugatti La Voiture Noire, Bentley Bacalar Mulliner, Aston Martin Victor, Lamborghini SC20, McLaren Sabre

McLaren’s MSO before Sabre had stated the will to move in this direction. Pagani too, which already produced an extremely low volume of cars, started introducing unique highly modified models for their wealthiest clients.

Additionally, over the last three years, more companies joined this exclusive club. Lamborghini released its second one-off SC20 again developed by a client working with Squadra Corse, after the SC18 Alston. In Aston Martin, the Victor could only be the firstborn of a project called Prototype Operations teased by Andy Palmer in 2017 during an interview for Road & Track. The then CEO claimed their intention to ramp this production up to two cars per year. Bentley too withMulliner and the super limited Bacalar (only 12 units scheduled) reintroduced its concept of bespoke coachbuilding.

SOME OBSERVATIONS

It will be interesting to see if this dynamic turns into a proper trend. As of now, it does seem the direction these automakers are moving toward. If so, it would represent an entirely new competition stage that could, in time, even change how “regular” luxury performance cars are perceived and how wealthy clients approach these brands.

If these projects become more frequent, it can be expected to see more and more clients requesting this kind of service. In turn, some OEMs could either decide to partially lower their production volumes to focus more on limited series (following Bugatti, Pagani, or Koenigsegg business model), or sell their “slots” for even higher prices, considering that these one-off cars already sell for several million each.

In this respect, market regulations and restrictions evolving in the coming years might play an important role too.

An interesting point of view comes from Mate Rimac.

In a recent interview, he draws a parallelism between the future of car ownership and horse ownership before the advent of modern vehicles. According to Rimac’s CEO, like horses were once the main mean of transportation and were substituted by tractors and cars, the same is bound to happen to cars leaving space to electric and autonomously driven ones.

As governments ban the sales of ICEs and, especially in big cities, the ownership of a vehicle becomes increasingly inconvenient, cars will eventually become a luxury for the few.

The ownership of the vehicle ‘to go from A to B’ will cease to exist. In his hypothesis, when cars will not be allowed to drive on the road anymore as it happens for horses even today, they will survive thanks to enthusiasts who will keep driving them on tracks or other designated locations.

While some assumptions might be debatable, and the role of modern cars in our society, as well as their intrinsic and symbolic values, are probably quite different from those of horses, Mate Rimac’s vision is worth mentioning as it could tie in with the one-off cars trend. If luxury sports cars become objects for an even smaller customer base, one-offs could become even more relevant within the brand strategy and this could be the beginning of something bigger for the future of the industry.

*Cover Image byLamborghini Media