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.

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.

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.

Bentley announces a £3 million investment to enhance its 3D-printed components production. An important initiative for Bentley’s communication and marketing strategy as well as an innovation for the future sustainability and efficiency of the industry.

Thanks to this improvement the automaker has manufactured over 15,000 components in 2021. And plans are in place to further develop this technology in order to create proper vehicle components and offer more personalisation to customers.

*Source: Bentley Media

Which could be 3D Printing or Additive Manufacturing (AM) real benefits for the automotive industry in the long run? And how does it play into Bentley’s business and marketing Strategy?

First, let’s have an overview of the current state of this sector

Additive Manufacturing in Automotive

The AM industry has grown consistently over the past years. Data from Wohler Associates report a constant growth slowed only by the impact of the pandemic. The effect was likely partially felt in 2021 as well. Nonetheless, since 2015, the year-over-year expansion of this market has been around 20% up until 2019.

Additive Manufacturing Market Value in Thousand USD (2015-2020)

In automotive 3D Printing brings several advantages, especially in the context of electrification. From small components to larger ones and more extensive use in general, AM allows for more accuracy and repeatability in manufacturing, as well as weight-saving thanks to the numerous new alloys obtained from special materials such as titanium or recycled plastics.

In turn, this creates designs that are more easily serialised and customised when needed, processes optimisation, and cost-efficiency. Which is also why a consistent number of companies applied AM in motorsport first.

Sustainable AM consultant and innovator EOS is a great example of such solutions applied to the automotive industry. Their brake pedal case study demonstrates the benefits of this technique. Starting from an aluminium component, the company wanted to develop the same piece while making it lighter and stiffer. The required result was achieved through the use of titanium and a hollow design that is often developed by really advanced algorithms or even AI.

The final result was a piece that weighed 178 g instead of a 190 (with the potential to go down to 80 g), and a reduction of displacement on stress from 1.8 mm to 0.6.

*Source: EOS Brake pedal case study

Last but not least, AM can also be much more sustainable thanks to two main factors. One is recycling. More and more start-ups today are able to recycle the powder used for the production process, or waste materials to manufacture new pieces. And secondly, efficient, lightweight structures like the one shown before for the car pedal, simply use fewer materials making 3D Printing already more efficient, not even considering the potential for significantly lower waste.

The use cases range is already vast. From component prototyping for pneumatic and hydraulic systems, gearboxes, and more, to emission filters, fuel caps, headlights, and taillights frames, or structures, body kits, grills, wheels, tubes, turbines, and more.

As cars become more standardised at least for high-volume production, 3D Printing will become increasingly important for automakers.

When it comes to luxury automakers instead, naturally the most important advantages of AM use will be weight reduction, durability, and potential for experimentation. The best example seen since the pandemic hit (at the last official Geneva Autoshow in 2019) is arguably the use of different techniques for the Bugatti La Voiture Noire concept developed by designer Etienne Salomé. The wheels were developed through AI to achieve the lightest and strongest inner structure possible and then printed. The rear lightbar too was realised through AM.

But now, back to Bentley's latest investment

Bentley’s 3D Manufacturing and Beyond100

Upon announcing this initiative, the Crewe manufacturer stressed the attention on its sustainability. From a marketing strategy perspective, in fact, AM plays well into the Beyond100 plan that Bentley put in place a few years ago. A roadmap to becoming the most sustainable luxury automotive brand in the world, introduced a while back while talking about Bentley’s results and evolving strategy.

Bentley has wisely tackled the sustainability issue from different directions, improving on every aspect of the business. Waste reduction, energy efficiency, recycling, materials research and sustainability, fleet emission reduction, electrification, logistics, and so on. All these measures are putting the brand firmly at the front of the sustainable automotive revolution.

The large investment so far has been employed to realise tools to improve the manufacturing processes, create prototypes, racing car components, and parts refinement for the Bentley Blower Continuation project. All of these use a range of over 25 different materials. More importantly, the internalisation of this production allows also the company to produce more parts in-house without the need to outsource as much, giving back more control on manufacturing.

Finally, Bentley too, as did other OEMs like Ferrari and Lamborghini since 2020 used these capabilities to produce equipment that could help hospitals and their staff during the Covid-19 crisis.

The AM optimisation enabled a 50% cost-saving on all the produced components as well as a significant lead times reduction.

Every luxury automaker has to different extents employed 3D Printing in its production, as shown in the table below:

*Most companies like Aston Martin, Porsche, and Lamborghini have later internalised AM for the production of prototypes and components

There are a few interesting takeaways to observe from the table. One is that Koenigsegg's early adoption shows the company’s innovative potential. But also the concept reiterated by its founder Christian von Koenigsegg when talking about the freedom that smaller companies enjoy compared to larger ones when it comes to innovating and trying riskier solutions:

“For example, with the Regera, I don’t see any of the other established brands, daring to remove shifting of gears. It’s such a fundamental thing to take away from a sports car, that I think it’s only Koenigsegg that could make that decision. And I’m very confident about the decision […] We take more freedoms like that”

Another evident factor is the importance of racing activities for sports cars manufacturers. Ferrari, McLaren, and Porsche all implemented 3D Printing in their racing divisions first, due to the performance capabilities of such components, both in terms of weight reduction, and durability. It must be noted that others like Lamborghini have later implemented the use of similar parts for their racing cars as well.

Finally, while more OEMs are bringing these skills in-house, the first ones that did it right from the start seem to be those that are part of large automotive groups. One of the drawbacks of this technology is, in fact, its initial capital intensity, and the cost of materials. While both machines and materials will eventually become cheaper, as with every new technology in its infancy the costs are initially high. So, the backing of a large automotive group is once again key to bringing in innovation.

The future of Additive Manufacturing

3D Printing is already quite widespread in high-volume automotive manufacturing. Technological development, more stringent environmental regulations and cars standardisation will arguably make it the best option for many components’ manufacturing going forward.

For luxury and performance automotive though the use of AM will have different implications, as it has been so far. The factors mentioned above (except for standardisation of course) will likely serve the sector to improve the cars’ sustainability and most of all to bring more innovation and personalisation. Prototypes and bespoke pieces’ development will become faster, cheaper, and more efficient, to the point in which even for the top segment, this technology will likely become the new standard.

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.

With the holidays approaching, a lighter theme seems due. So, here is a follow-up on the 2020’s video about Christmas-related automotive social media marketing campaigns and YouTube videos.

For the second year in a row, Bentley published a Christmas video for the holiday. Last year’s one, included in the 2020’s article 5 Christmas Automotive Social Media Marketing Campaigns, showed the Bentley Mulliner division producing a tailored-made Flying Spur for Santa Claus himself. This year, there is another clever idea. When Christmas decorations go missing, Bentley apprentices come together in secret to use their skills and create unique decoration pieces from cars’ materials to save the day.

Another great idea because along with bringing a festive and light atmosphere the video displays the creative potential and craftsmanship abilities of Bentley’s staff. Skills applied for these little creations and the same that are used for each car’s component.

So far, the video has been really successful. Views are, in fact, way above those of other videos published throughout 2021 at over 800,000. Just 13 days after its publication, it is already the 5^th most viewed video of Bentley’s official channel. This definitely shows once more the potential of alternative themes that even when touching the automotive topic only indirectly or through emotional connections, can become even more attractive to the target audience than the regular commercial showcasing the car or its performance.

This is the case for other brands’ similar campaigns too. Here are a few examples.

Proofs from Previous examples

Other companies have not (or not yet) published any special video for the holidays or the end of the year. Nonetheless, the numbers shown in the graph below suggest some interesting observations.

Bentley, Lamborghini, and McLaren Holiday videos' view count against 2021 results

*McLaren boxplot includes both the automotive and F1 channels

Among the automotive companies in the luxury and performance segments, Bentley, Lamborghini, and McLaren are the ones that produced dedicated content for the Christmas holidays in the last few years. As visible from the graph, the dark red points correspond to the holiday videos, and here are compared to all the others published in 2021 by each company. It is not a surprise then, that in terms of views count they are always outliers in the top part of the boxplot.

In the extreme case of Lamborghini, not only all three videos are at the top, but the views exceed those of any other video on the official channel by a significant margin. The video “Lamborghini Real Lover”, at 23,6 million views is not just the most successful video published by Lamborghini, but also one of the most successful automotive marketing campaigns on YouTube overall, behind only Porsche’s “The Heist”, and Mercedes-Benz “Magic Body Control”.

Also, even though Lamborghini has the most prolific channel among the ones in the graph, considering that McLaren content is split into the automotive and the racing one, the number of videos published has no statistical relationship with the channel’s success.

This is evident by looking at the same graph for Ferrari’s channel, the most active by far, with over 1,700 videos published (while Lamborghini reaches “only” 613 and McLaren 1,091 with both channels). Here, Ferrari uploads every piece of content, from Formula 1 to the automotive business, to customer racing, and more. Views are in general much lower than those of its competitors though, and the year-end celebration video of 2020 too is just slightly above the boxplot’s third quartile.

Ferrari 2021 and Year-end 2020 videos views count 

So, as reviewed in the Marketing Racing articles about Porsche’s “The Heist” and McLaren Marketing Strategy there is more involved in the success of social media campaigns.

Other 2021 Campaigns

As mentioned at the beginning of the article, not many other companies have joined Bentley so far this year. McLaren has been the only one so far through different platforms.

On both Facebook and Twitter McLaren automotive is publishing its own version of the “25 days of Christmas”, with the hashtag #25DaysofMcLaren. Each daily post features a short video with a car and some design or technical detail about it.

On YouTube, once again, McLaren went for the Formula One channel for the Christmas video. The element that has proven key to its success on social media is replicated here. The protagonists are the two current F1 drivers Lando Norris and Daniel Ricciardo, and the internet is responding, with the video reaching already over 120,000 views in just 6 hours.

The Formula One team has been the most important communication channel for the brand, ensuring the biggest following in F1 and a huge audience on every platform. Most of the views shown by the boxplot’s outliers are, in fact, from the F1 channel in the graph above.

Another mention goes to Lamborghini which, so far, did not follow up the previous years’ successes. However, it promoted a charitable initiative through LinkedIn for the International Human Solidarity Day supporting the Parents’ Association for Pediatric Hematology and Oncology. The Italian brand also teased something new coming under the hashtag #tothemoon, which will most likely be an NFT-related initiative that could end up referencing the holiday period. This would make Lamborghini the second automaker to enter this new space after Alpine sold the A110 GTA Concept as a Non Fungible Token.

Last but not least, BMW published its own Christmas video. A fun short film in which even actor Christoph Waltz is involved. This one too in just four days has received a lot of visibility reaching over 7 million views.

Edit: Lamborghini too on the 23rd released its usual Christmas Celebration video called "Lamborghini Christmas Gift 2021". With the same narrative of previous videos, Lamborghini shows the true emotions of driving in a Lamborghini.

This year Bentley has got the right formula for Christmas. And as the numbers show these activities can definitely pay off in terms of exposure. We might still see some new interesting campaigns in time for Christmas or New Year’s Eve 2021, in the meantime, I wish everyone a Merry Christmas!

This is the third article within the “Marketing Mix” series, and this week is about Bentley.

I previously discussed Ferrari and Aston Martin, applying the same analytical framework to each brand to highlight their respective strategy, important developments, and peculiarities. Here you can find the previous articles regarding Ferrari and Aston Martin:

Ferrari Marketing Mix: The Prancing Horse's 8Ps

Aston Martin Marketing Mix: The Company's 8Ps

The first characteristic that distinguishes Bentley these days, is that it certainly is one of the most interesting brands in the luxury segment in terms of transition toward electrification.

Bentley was, in fact, recently put under the management of Audi, like Lamborghini before, thanks to the numerous synergies with it. Shared components and platforms with both Audi and Porsche are important efficiency factors. With it comes also the fast transition to electricity and a more sustainable future.

As highlighted in a review of the automakers' R&D spending, VW is by far the automotive group investing the most right now, and the majority of it is dedicated to ACES (autonomous, connected, electrified, shared). Bentley follows this effort with its Beyond100 Strategy announced in 2020, and aimed at establishing the British marque as the leader in sustainable luxury mobility. The symbol of this change is the EXP 100 GT concept, which won an important GQ award last year as the best concept car.

This decided change of pace naturally influenced Bentley's marketing and communication strategy.

METHOD

The framework used is the Marketing Mix 8Ps, applying Booms and Bitner's 7Ps (1981) and Goldsmith's 8th P (1999) methods. The framework is described more in detail in the first article of the Series linked above, about Ferrari's marketing mix.

PRODUCT

Bentley's product line currently offers three models, Bentayga, Continental GT, and Flying Spur. An SUV, a quintessential Grand Tourer, and a fully-fledged 4-door Luxury saloon.

The range might seem fairly limited compared to the other two brands analysed previously, but, while the others offering spans from performance to luxury cars, Bentley's product-line is much more focused on top-level luxury without overlooking significant performance for every model.

Also, each one is offered in various specs and trims. Most of them are introduced with the Bentayga that can be ordered in four different versions. The base model V8, the hybrid, which is more energy-efficient and still preserving its performance, the Speed, the fastest of all four, and the recently introduced S which improves on vehicle dynamics and looks sportiness.

As for the others, the Continental GT has three versions, V8, Mulliner, and Speed all coming either with the hard-top or as convertibles, and the Flying Spur, with three engine options, a V8, a W12, and a V6 Hybrid.

*this graph includes also the limited edition Bacalar (12 units) unveiled in 2020 and relaunching Bentley's customisation division Mulliner

The line-up is following the Beyond100 strategy according to which every model will have a hybrid option by 2023. Also, Bentley's first full-electric vehicle should arrive by 2025 and will most likely be an SUV too. Since its introduction, in fact, the Bentayga has been by far the most successful model. Its sales have consistently accounted for around 50% of the total. In the last two years alone, 9,178 units out of the 23,123 produced were SUVs.

Like the existing one, the new model will most likely use Audi's shared platform. Either MLB (Modularer Längsbaukasten, German for Modular Longitudinal Matrix) on which are developed the Bentayga, the Urus, the Touareg, Porsche's Cayenne and Audi's Q range, or MSB(Modularer Standardantriebsbaukasten, modular standard drivetrain matrix) used for Continental GT, Flying Spur, Panamera as well as the electric Porsche Taycan and Audi E-tron GT.

Bentley's product line, as the brand, is at the absolute top of the market for reputation, materials' choice, and craftsmanship. Its most direct rivals are Rolls-Royce and Mercedes' division, Maybach. Bentley however maintains also its racing heritage, so, all of its vehicles, especially the sportier ones, are capable of noteworthy performance with the Continental GT Speed at the top, producing 650 bhp, for a top speed of 208 mph and a 0-62 mph time of 3.5 seconds.

The design language is extremely coherent across the whole line and it has been so over the last few decades. Clear design cues such as the double rounded headlights and the straight, muscular lines with an imposing stance, proper of a luxury vehicle are all unmistakeably Bentley. All of this though does not mean a lack of creativity or innovation. The design has been skilfully updated over the last generation to modernise each models' sculpture.

And the same happens inside. Every Bentley's interior features carefully crafted metal components, paired with refined wood veneer (sustainably sourced as proudly claimed by Bentley) to offer the best quality possible, but all on a very modern interpretation. From the comfort and luxury features to the now-famous 3-face rotating infotainment display.

Finally, every new model comes with a three-year warranty and a wide range of accessories and options to upgrade. A collection of luxury lifestyle items and apparel is offered as well to create a more immersive brand experience.

*Bentley branded accessories sold in the brand's Boutiques. Source:Bentley Media.

PRICE

The price positioning is at the top end of the market. With the Bentayga being the cheapest and starting at around £140,000, with the hybrid version slightly less expensive and the speed version going up to slightly over £180,000. Follows the Continental GT with an entry-level price close to £160,000 and £175,000 for the convertible. This can go up to an estimated £200,000 for the speed version.

Finally, the luxury Flying Spur price varies between £168,000 and £180,000. All of these are before options, that can drive the car easily over the £200,000 mark, especially if they are part of a limited edition. For instance, the Continental GT First Edition costs £34,000 more than a regular one.

In general, Bentleys are priced significantly lower than its direct competitors Rolls-Royces, which all start well over £200,000, and reach the £300,000 with the flagship Phantom.

Prices though are aligned with those of other manufacturers' cars in a similar segment, such as Maybach GLS for an SUV, and Aston Martin DB11, or Ferrari Roma as Grand Tourers.

Also, Bentley, last year introduced the ‘Certified by Bentley' program. This includes servicing, warranty, and certification for pre-owned Bentleys. The program should boost the pre-owned market and limit Bentleys' depreciation rate which has been quite serious for some models, affecting the brand's reputation. Mid-2000s Continental GTs can be bought today for as low as £20,000 in the UK, which surely hurts the cars' perceived value.

PLACE

Bentley's manages its distribution through a franchise dealer network. Each dealer has to go through a strict application process and satisfy specific conditions to qualify.

As it usually happens, especially in big cities, these dealers are located in areas with a high density of high-net-worth individuals, where other luxury automakers' dealerships are clustered or within important business districts. In smaller urban centres dealers might be simply located in automotive dealership cluster areas.

Two examples are London and Paris, where the dealers are located respectively in Berkeley Square and within the 8th arrondissement. Both areas enjoy the characteristics described above.

*Bentley's dealerships areas in London and Paris

The virus outbreak forced automotive companies to find alternative ways to keep their relationship with clients and provide the proper services. Bentley implemented numerous services within the two apps ‘My Bentley' and ‘Bentley Network'.

PROMOTION

Bentley built its communication around the new sustainability mission with its ‘Brand Manifesto' stating all the steps toward carbon-neutrality. This and the unparalleled luxury are the two pillars of Bentley's marketing strategy.

Another characteristic that has been constantly promoted is the racing heritage of the marque. Bentley has used its history and success in racing and endurance on different occasions, with the first participation to Le Mans dating back to the 1920s. The latest and more innovative of these are the official participation in an E-sport series, and the steering wheel for both the Continental GT3 and the simulator developed in partnership with Fanatec.

Motorsport is still nowadays one of the main activities of the brand and a major promotion channel. Bentley participates through customer racing teams in different GT racing classes with its Continental GT3.

*Three main elements of Bentley's promotion, The EXP 100 GT EV concept, the Fanatec Steering wheel, and the GT3 race car. Source:Bentley Media

Built around the brand's pillars and ownership experience, Bentley organises also a series of events for both clients and prospects. They can range from car launches to driving experiences, to motorsport and lifestyle events. Naturally, venues and organisation reflect the luxury values of the company, including cocktail parties, music, and special presentations. Another range of activities is dedicated to enthusiasts as well, where they can take part in factory tours, and visit showrooms featuring the entire range and personalisation area.

Finally, along with all the more ‘traditional activities', a large part of the promotion nowadays happens through social media channels. Bentley enjoys a strong following across all the major platforms, but most of all the online visibility is given by the numerous channels of reviewers and enthusiasts who publish daily content about automotive. Naturally, Bentley, thanks to its unique characteristics of market-leading luxury combined with sportiness is always among the major players in this market segment, and a quick shift toward electrification could help the brand distinguish itself even more.

PARTICIPANTS

The points of contact between customer and brand are numerous. As mentioned before, the relationship develops through events, and direct experience at the dealerships, for example when specifying a car's personalisation at Bentley's Mulliner division.

New points of contact are added thanks to the expanding digital channels, apps, and other services for clients.

Employees too, go through a highly selective process of selection when applying and a consistent number of Undergraduate programs are also offered. Generally, the environment is judged positively and according to LinkedIn data, the average tenure is 6.7 years which is significantly higher than the majority of its competitors.

PHYSICAL EVIDENCE

Bentley is regarded as the epitome of automotive luxury, and everything around it reflects this image. Franchised dealerships strictly respect the brand message from the employees' outfits to the furnishing and overall design of the spaces.

There is a proper sense of opulence as one feels while sitting in an actual Bentley car. Good examples of this are the Global Flagship Showroom opened in Dubai opened in 2016, and the CW1 House in 2014, a showroom showcasing Bentley's models as well as a dedicated space for personalisation, Mulliner room, and boutique.

*Bentley Dubai Flagship, Boutique, and Mulliner Department interiors. Source:Bentley Media

The Mulliner department reflects the brand refinement by showcasing a range of options that the client can pick from when specifying his/her bespoke car. Similarly, the boutiques display a wide range of branded items and lifestyle products all in an up-scale and refined environment.

PROCESS

The processes and customers involvement is changing in automotive. On the one hand, digital systems are more common than ever, due to a decisive boost during the pandemic lockdowns. With digital services, clients can get a more streamlined service and automakers can gather more data to keep improving their processes, products, and services.

When it comes to luxury goods, however, a higher degree of involvement by the company is not only preferred but also a key factor distinguishing a high-end service. For Bentley, this translates into the specification of bespoke vehicles through the Mulliner division or the new ‘Certified by Bentley' pre-owned program. Without reducing the points of contact also, digitisation will enable automakers to create more bespoke on-demand content for each client, as well as improve the quality and range of services with the use of more advanced graphics engines.

PERSONALISATION

As stated on other occasions, an increasingly customer-centric luxury market where personalisation and rarity have become the true luxury, caused an important development in the luxury automotive segment. Every major luxury automaker has improved its customisation service, and many went even further creating few-off or unique pieces for super-wealthy clients.

Bentley, which was already offering a high degree of personalisation on its models, announced the return to the coachbuilding traditions at the beginning of 2020 with its Mulliner Bacalar, and open-top, 2-door, super rare grand tourer (only 12 units will be produced).

*Bentley Mulliner Bacalar. Source:Bentley Media

The division offers different limited runs of special editions, which are predesigned with some unique specifications, like the Pikes Peak. Mulliner is also constantly expanding its materials range. One of the latest is a tweed door finish available on all three models.

The true next-level innovation in terms of making the customer experience more personal and unique is the introduction of Adaptive Music Technology. Bentley partnered with LifeScore, which through an algorithm uses the vehicle's inputs like acceleration, or engine's RPM, to change the music accordingly in real-time. The same technology was introduced by Supercar Capsule's Founder Andrea Sensoli during our interview, but it is definitely a first for a car, distinguishing once again Bentley as an innovator and an absolute leader of the luxury segment.

It is from last week, an important announcement by Bentley regarding a further step into the world of e-sports with a unique initiative and the collaboration with an extremely active player within the sector: Fanatec. But first, let’s see what has been going on so far.

Back in 2020, right after the pandemic hit, the world of motorsport experienced a significant and sudden change. Sim-racing, like official virtual competitions in numerous other fields and videogame genres, was already on the rise. But the global lockdowns, and other health and safety measures put in place to contain the spread of the virus gave the booming e-sports industry a further push.

The mean of choice for this were the various Livestream platforms on the internet. Countless personalities, both born online and coming from real racing (such as almost the entire new generation of Formula 1 drivers) found themselves spending more time involved in e-sports events.

In addition, leagues and brands joined the movement organising major events and racing leagues like never before. Along with Formula 1 continuing its official e-championship, FIA WEC Le Mans Virtual 24 hours was also held for the first time.

The audience increase is clearly reflected in the number of views and hours watched recorded by Twitch for major racing simulators such as iRacing, Assetto Corsa, and Assetto Corsa Competizione.

IRACING TWITCH VIEWERS AND HOURS WATCHED

ASSETTO CORSA TWITCH VIEWERS AND HOURS WATCHED

ASSETTO CORSA COMPETIZIONE TWITCH VIEWERS AND HOURS WATCHED

Ferrari just held the Annual General Meeting of Shareholders, and the Exor CEO and current Ferrari CEO John Elkann gave some important statements. The most-reported these days has certainly been the one about the release of a full-electric model by 2025. The year promises to be full of surprises, as many of Ferrari’s direct competitors, Aston Martin, Bentley, and rumours say even Lamborghini, plan to release their own EV in 2025.

Most of the talks, however, have been focused on Ferrari “continuing to execute the electrification strategy in a disciplined way”. But in the modern automotive industry that has become almost a necessity. The most interesting partof the statement was arguably the following one:

“our interpretation and application of these technologies both in motorsport and in road cars is a huge opportunity to bring the uniqueness and passion of Ferrari to new generations”

It shows what is the rationale and the vision behind the first claim. The renewed strategy of the company that so far, in some ways, looked more detached from its younger audience of potential future clients. It shows Ferrari’s intention to be there to inspire EV enthusiasts, which are on average much younger like it has inspired generations before them with its ICE supercars and race cars.

*John Elkann, Exor CEO and Current Ferrari CEO

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.

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

As this strange 2020 draws to a close, I thought it would be fun and fitting to review the best social media marketing campaigns and different approaches used by the luxury automakers over the Christmas period to either celebrate the holidays or give an outlook on their 2020.

1. THE CHRISTMAS GIFT – LAMBORGHINI

As usual, by now, Lamborghini publishes the most successful Christmas-themed video of all. It is called The Christmas Gift, quickly approaching 6 million views in around two weeks on YouTube and over 14 million on Instagram.

The ad perfectly captures the spirit of this year’s holidays spent, in the majority of cases, away from friends and loved ones. Even so, and almost without showing the car Lamborghini manages to convey the most important values of its brand. Passion and love for the thrill of driving.

Much like the two campaigns released in previous years, this one has been received enthusiastically.

The same video, in fact, is already the second most-watched on the recently created Lamborghini official Tik Tok Channel with over 3 million views. Lamborghini being the second company in the space after Mercedes Benz to enter the platform and shortly followed by Porsche, while all the others

2. BENTLEY TAKES ON A VERY SPECIAL COMMISSION – BENTLEY MOTORS

This is in my opinion the smartest and funnier Christmas ad published by a brand in the luxury performance niche this year.

Bentley receives a commission for its flagship Flying Spur by Santa Claus himself. The video featured in the latest article about Bentley Marketing Strategy involves not only Product and Design managers, and a Mulliner’s specialist (Bentley’s personalisation division), but also showcases some high-end bespoke features and craftsmanship capabilities. 

The ad got a good reception on other platforms as well. On Instagram instead, Bentley has started a series of holiday-related posts under different hashtags both through @bentleynewsroom and the official page @bentleymotors to promote winter initiatives like #BentleyFestiveTour, #12DaysofBentley, and the challenge #BentleyFestiveLights.

3. A MESSAGE FROM AN F1 TEAM TO THE OTHER - MCLAREN

McLaren’s initiative has also been received with praise on every online platform even though it was not through its automotive company channel but via the official McLaren one. The company from Woking used its most powerful channel right now, the Formula 1 team.

Building on the 2020 season’s success and the extreme popularity of its drivers among the sport’s enthusiasts, the Formula 1 team published a video sending Scuderia Ferrari the Christmas wishes along with a gift. Formula 1 driver Carlos Sainz, who will be joining the Scuderia next year after two successful years in McLaren.

This has been one of the most captivating social media initiatives not only in the automotive space but also in Formula 1 as a great example of the values that move and shape the sport. So despite not being dedicated to fans or enthusiasts but specifically to a Formula 1 team, I thought it definitely deserved to be mentioned here.

Another interesting campaign is the 25 Days of McLaren published on Instagram and Twitter under the hashtag #25DaysofMcLaren. A series of short videos published once per day and leading to the 25th of December inspired by the Christmas Carol 12 Days of Christmas. Each one is a throwback to an important moment of the company’s year, remembering achievements and important successes in this difficult year.

4. DRIVE DEFINES HER AND THE 12 DAYS - PORSCHE

Porsche has published the first episode of what will likely be a series celebrating gender diversity(and maybe more) not just among automotive professionals but also its customer base through different professional paths. Drive Defines Her.

This first video features Nayla Al Khaja. She is the first female director and producer in the UAE, who also manages a production company a film Club in Dubai. Al Khaja is also active on social media and events as an influencer.

This is a sensitive topic that will resonate differently from more conventional automotive ads with its audience. However, it is an important statement on this topic.

Finally, much like McLaren and Bentley Porsche too had its own 12 Days of Porsche published on Twitter. A video each day featuring real music and Porsche-related lyrics.

5. A LOOK BACK AT 2020 - FERRARI

On December 23rd Ferrari released a video revisiting the main events of its 2020. It is an interesting piece of content to appreciate the variety of activities within the Ferrari Business and Marketing Strategy as well as the help offered to the community during the pandemic. E-sports, GT competitions, new models, merchandising, museums, the respirator valves, Formula 1, and more.

AN HONORABLE MENTION - MERCEDES

This is not listed among the others because along with a few ‘more traditional’ posts on social media, the piece of content in question has not been published on the major platforms and is dedicated to a specific demographic. The people working in the media.

After this difficult year, Mercedes with this short and “light-hearted” video published on its website celebrates the effort of the professionals involved in the industry who kept working to bring news and information about their products during these times.

Definitely an interesting point of view that no one else expressed.

Which ad or campaign was the best this year? Share your thoughts and comments below or on social media!
In the meantime, I hope this was a light and fun read.
Best Wishes of a Happy New Year!