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.

2024 was a complex year for the automotive industry, with legacy automakers losing significant ground either in EV market shares, financial results, or both. This is due to several factors affecting the industry. Geopolitical, technological, and trends among consumers. While there is no doubt that the future of automotive is electric (at least in large part if not completely), the same might not be completely true for the luxury performance niche for the foreseeable future.

EVs are “young”. While cars have been around for well over a century, the true development of consumer-ready electric cars is barely around 15 years, and there are still countless areas of significant improvements that can completely change the product and user experience in years to come. Going from batteries to software, and more.

After early adopters jumped on the bandwagon and the excitement “died down”, it left space to critics and doubters. This, particularly in 2024, is reflected in a significant drop in EV sales in the West. China is the great exception, with EVs not only growing but reaching around 65-70% of the global share.

Luxury Automotive OEMs review their electrification strategies

It is throughout this difficult period for the industry with many OEMs committing significant investments in EV-related technology, like Ford's $14 billion for the EV expansion in the US, that some started going back on their development strategies.

The latest of which is none other than Porsche. The German automaker has been a strong and early promoter of the new powertrain technology, with its Taycan, initially named Mission E, and many more in between from concepts like the Mission R, or Mission X, to actual all-electric production version of its “traditional” lineup like the latest Macan.

It has to be said that Porsche never fully went in only one direction. A while back they made the headlines with their big investment in E-fuel development for their legacy models and classic cars (Link E-fuel article here), but an estimate of their investment in EV technology just in the last 3 years is around $25 billion.

Only a few months ago Porsche announced it was reviewing its EV strategy stating they are reducing their EV development targets. Key reasons for this have been sluggish sales of its EV models due to low demand, the significant investment required to continually develop software and technology for its new models, and, not to be underestimated in the luxury sector, the drastic depreciation hitting EVs in general, trend for which the Taycan has unfortunately become a symbol.

Porsche Taycan Depreciation over 1 and 4 years

A quick look at the Taycan (Coupé) current rate of depreciation shows a quite worrying situation, that any buyer in this segment would seriously consider before the purchase. Compared to 2024’s prices for the different trim levels as new starting at £86,000, and topping at £161,000 (excluding the Turbo GT version that was not available in the previous generation Taycan), models purchased earlier in the same year depreciate by an average of 31% on starting prices that do not include options yet, and over 51% in 4 years. If options were included in original sales prices these percentages would increase even more.

A first announcement by the German automaker stated that the previous target of 80% of BEV sales by 2030 might not be achieved due to factors previously stated. Chairman Lutz Meschke said: “We will refresh our combustion engine cars, including the Panamera and the Cayenne, and of course, we will continue to rely on plug-in hybrids”. He continued “When it comes to research and development, you’ll see more flexibility in the upcoming years. We will develop new combustion-engined derivatives in order to give the right answer to customer demand”. This could, for example, be reflected in the decision of releasing an ICE version of the upcoming 718 that was notoriously set to become a BEV only, announced by the Mission R concept a few years ago, to try and renew the product line and revive its sales that has been somewhat slow over quite a few years.

*Mercedes-Benz BEV CLA Concept

Right before the German automaker, compatriots at Mercedes-Benz went through a similar process. Initially the development of the MB.EA-Large EV platform planned for 2028 was halted, then came the delay of the target of 50% sales of electrified models (BEVs and PHEVs) from 2025 to 2030, and it’s a few days ago the announcement that the production of the CLA concept unveiled a while back has also been delayed due to development issues.

In Great Britain too, automotive OEMs follow the trend. Aston Martin, amid a slowly and very gradually recovering financial situation, delayed the announcement of its first EV to 2026 which was initially set to come this year. Geely-owned Lotus has reportedly abandoned the plans to go 100% electric and Bentley too, which was set to reach the same target by 2030 confirmed that hybrids will likely remain on sale even after that date.

Is there more to this trend?

As mentioned previously, China is going strong and its EV market is in constant evolution with serious competitors coming to the global stage and making the headlines with important achievements. These days in the Western media the peak of this wave has surely been Xiaomi’s SU7 which in its “Ultra Prototype” iteration (which is not road legal) managed to attract everyone’s attention with a lap time of 6:46.874 at the Nürburgring Nordschleife becoming the fastest EV on the track. It comfortably outpaced the £1.8 million Rimac Nevera (7:05.29) and the new £186,000 Porsche Taycan Turbo GT with Weissach Package (7:07.55) with a prototype that is said to cost just around £94,000.

While this is working well for the mass market though in China, luxury automakers have a different and much smaller customer base, and on top of that for several of these brands the largest markets are still in the West (usually the USA) and currently made on average in larger part of people around 50+year-old or older. This demographic, grown up with specific expectations about the performance and sensations that a performance luxury car can and should offer seems fairly opposed to electrification and its added value proposition compared to combustion-engined cars. So, this is the obvious and most likely factor due to which the market niche is highly likely to remain mostly ICE-driven in the short to medium term, with hybrids decisively taking their place.

There are potential alternatives with the likes of Ferrari attempting a new approach to BEVs as discussed previously, or a new developing trend of Extended-range Electric Vehicles (EREV) which is mostly aimed at solving range-anxiety and thus not likely to make luxury car buyers fall in love with performance EVs.

*Xiaomi sets lap time at the Nordschleife

The most emblematic example of this change happening over the last year or so is the statement released by Rimac’s CEO Mate Rimac confirming that luxury car buyers simply do not want performance EVs. According to some, this could be hinting that upcoming models by the Croatian brand will get some sort of internal combustion powertrain component. In terms of sales the only exception in the year just passed has been the Rolls-Royce Spectre, which is naturally not focused on performance and thus (as founder Charles Rolls said over 100 years ago) takes advantage of the silent and smooth powertrain enhancing all the characteristics that brand’s clients look for.

What could be next?

As the market composition, especially for traditional luxury automakers seems unlikely to drastically change in the short term, a significant change could be once more driven by forward-looking markets like China.

With the offering of sporty BEVs increasing in China, customers more used to, or growing up in a market dominated by EVs may first start trends that define new value propositions more suited to the electric powertrain that go beyond straight-line acceleration (already proven not sufficient to convince sceptics) and would probably fall in technology applications and EV-specific driving-related use-cases.

Last but not least, a determinant factor that could change traditional performance car buyers’ mind is a revolution in EV battery technology. If new chemistries bring a significant improvement not much in power density, but in volume and weight reduction like some such as solid-state promise, they could help OEMs bringing down the overall cars' weight to the 1,500 kg average of current performance cars and thus significantly benefit dynamics and driving capabilities.

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.

On the 2nd of November, it was officially announced the operations’ commencement for the newly established joint venture Bugatti Rimac d.o.o. born from the partnership of Rimac Automobili with the German Group and especially with Porsche that now owns a 45% stake in the new company, and a 22% in Rimac Group.

The latter too is a new entity led by Mate Rimac under which the Joint Venture, and Rimac Automobili, as an independent company, will stay along with Rimac Technology, the division which will continue the production of battery systems, drivetrains, and other EV components that were key to Rimac’s success. To go more in-depth into the details and implications of this new entity you can check the previous article ‘Rimac signs historic Strategic Joint Venture with Porsche to form Bugatti-Rimac’.

*Mate Rimac during the joint venture announcement. Source:Rimac Media

On Monday, July 5th, 2021, Rimac Automobili held a live event during which were announced a series of changes at the corporate level that represent historic milestones for the young Croatian company.

Mate Rimac, on the stage, revealed the birth of Bugatti-Rimac, a strategic Joint Venture between his company, now the leader in the super sports electric vehicles, and the long-standing high-end French automotive brand part of the VW Group.

The discussion began around 18 months back, and after a while rumours started to spread on the internet about VW selling Bugatti to Rimac, and Porsche simultaneously acquiring a higher stake in the EV automaker.

There are not many details about what went on behind closed doors, but on Monday the result of this discussion was finally revealed. So, let’s have a look at what are the deal’s implications and why it is important in this moment of the luxury automotive market.

RIMAC’S NEW STRUCTURE

*SourceRimac Media

This is Rimac's updated corporate and shareholding structure as announced during the event.

*SourceRimac Media

Rimac is the latest success in the luxury automotive industry, and in just 10 years distinguished itself for being an extreme innovator with its high-performance electric powertrains as well as other correlated technologies. As Mate Rimac stated during an interview:

“In order to survive, we basically became, at the very beginning, a technology company”.

*Rimac C_Two Production Line©Rimac Media

The luxury automotive segment is an extremely competitive niche, with just a few strong players and very high entry barriers. Over the last 30 years, many tried and very few succeeded. While electrification is partially lowering such barriers on the engine side, other aspects and services required from a modern vehicle are much more complex than before.

An electric motor, in fact, with fewer moving parts (around 20, against the combustion engine’s 2000, according to MES Insights and Drive electric) will be cheaper in terms of R&D. Superior costs for automakers so far might have included the battery packs, but with the increasing competition that too has decreased a lot.

EV BATTERY PACKS COST REDUCTION ($ PER KWH)

*Source:Statista

On the other hand, though, modern cars need a lot more attention on electronic components. Much of the competition has moved toward IoT, self-driving, and AI systems. Additionally, for a modern luxury car, there are two important considerations to make.

The first is that the fully electric car is not yet accepted by some buyers. The majority is uncertain or against this technology, so a new company might consider developing a powertrain based on internal combustion engine or at least hybrid technology, thus losing that ‘electric motor ease of development’ advantage. For this reason, some companies source their engines (as well as other components) from established manufacturers instead of producing them in-house.

The second is that a luxury car ownership experience is expected to come with a truly special andcustomer experience.

So, despite this new era for the automotive industry, it does not seem easier for start-ups to enter this market. But who are the new players and what do they need to succeed?

NEW ENTRANTS

Let’s have a look at some of the most interesting new companies trying to make it into this competitive niche between 2020 and 2021.

1. Automobili Estrema

The new company, founded in 2020 in the Italian motor valley, has just introduced its flagship full-electric high-performance car, Fulminea. In the land of V8 and V12 ICEs, Estrema brings innovation with a 2040 horsepower hypercar powered by 4 electric motors and a hybrid battery pack. It will in fact feature supercapacitors paired with solid-state cells. Fulminea will be produced in just 61 units.  

This company is the vision of entrepreneur Gianfranco Pizzuto, already an early investor in Fisker Automotive in 2007, a precursor of the hybrid electric technology in automotive with the Karma and many years in the sector. With him, other experienced executives worked for important companies such as Mercedes Benz, BMW, and Nio.

*Source:Estrema Automobili

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

A couple of weeks back, the news spread about Volkswagen’s intention to sell its top luxury low-volume automaker, Bugatti. What is more surprising is that Croatian EV automaker and tech supplier Rimac has been quoted among the interested parties in the purchase. As many by now suggested though, considering Porsche’s interest in Rimac, the move seems definitely less unexpected.

BUGATTI SALES FIGURES (2005-2019)

In 2019, the company closed with an estimated €253.57 million revenue (Dun&Bradstreet) and a record sales of 82 vehicles. The sales graph shows mainly the lifecycle (so far) of their two main models, Veyron, and the successor Chiron. In the last two years also, the company attracted, even more, the attention of professionals and enthusiasts’ community with the release of the £4.5 million Divo, the £9 million Centodieci, and the £12 million one-off La Voiture Noire, respectively planned for 40, 10 and 1 units.

WHAT ABOUT VW’S DECISION?

Bugatti’s parent company and owner of numerous other major automotive brands, Volkswagen Group has recently gone under a radical management restructuring. Herbert Diess current group CEO, recently replaced as VW brand CEO by Ralf Brandstaetter, has been at the forefront of the efforts to cut costs, especially in these difficult times, to free resources and allow a fast transition to large-scale electrification. In the first half of 2020, VW Group with a 23% drop in sales, has so far reported a pre-tax loss of €1.4 billion.

According to some reports then, selling the luxury marque would be part of this cost-cutting strategy by the German automaker. But because Bugatti’s acquisition was strongly wanted by Ferdinand Piëch, it would not be possible for VW to just sell the marque.

Ferdinand Piëch *Source: Wikipedia 

Especially considering that over 50% of the group is controlled by the Holding Porsche SE, whose 50% is owned by the Porsche-Piëch family at 50%, who however retains 100% of the voting rights.

Herbert Diess *Source:Volkswagen Media©

At the same time, Rimac, the Croatian firm leading the luxury performance electric vehicle niche, has become a major player, thanks to its know-how, collecting numerous partnerships and investments. You can read more about it here Nico Rosberg enters the Rimac Family: Rimac Business Model.

So, in the described plan, Porsche that acquired a 15.5% stake in Rimac in two years, would increase it up to 49% while the EV manufacturer would buy the Bugatti brand which would effectively remain, at least partially under the VW Group. Naturally, this process would need the approval of other important stakeholders such as the Chinese Camel Group that owns a 14% stake.

SOME OBSERVATION

To answer the first question at the beginning of the article, this exchange would not only allow VW to save costs and focus its resources on mass-produced electric cars but would also grant Bugatti a faster transition toward electrification thanks to Rimac.

At the same time, the Croatian manufacturer, who despite the blazing success has so far produced a very low volume of cars, could benefit from Bugatti’s expertise. Considering the differences in values and characteristics between the two brands they would also not risk cannibalising their extremely limited sales.

As for the other companies, Lamborghini, Bentley, Ducati, even the design company Italdesign would all be under scrutiny. However, regarding luxury automotive brands Lamborghini and Bentley, there are three reasons that put these two brands in a stronger and more integrated position compared to Bugatti.

First, both Bentley and Lamborghini share important components of their SUVs, luxury, and sports cars with other VW Group brands. Bentayga and Urus share VW’s MLB Evo modular platform (Modularer Längsbaukasten, German for Modular Longitudinal Matrix) with Audi’s Q and A product lines, VW Touareg and Porsche Cayenne. As for the engines, Urus, Bentayga, Continental GT, and Flying Spur share the 4.0 Litres V8 engine with Porsche and Audi. Additionally, Lamborghini also shares with Audi the 5.2L V10that was mounted in a late version of the Gallardo and on the Huracàn. All these factors not only translate into a significant cost reduction but are even more significant when considering the highest profit margin on each of these cars and the current market trend. The two companies’ SUVs are in fact by far their best-selling models. In both cases, they account for around 50% of the total sales or more.

*Source:Bentley Media© &Lamborghini Media©

Secondly, both Lamborghini and Bentley look ahead of Bugatti in terms of electric technology integration and development. Both have shown concepts of full-electric cars, Terzo Millennio and EXP 100 GT respectively. They also all have already developed hybrid platforms, Lamborghini with the Siàn and Bentley with the Bentayga. Additionally, Bentley can boast already a well laid-out development plan to reduce emissions and develop a greener product lineup with the Beyond100 Strategy. Check Bentley H1 Results and Beyond100 Business Strategy to know more.

Third, both have been performing significantly well in the past few years in terms of sales numbers becoming leaders in their segments, with only Ferrari coming close. This holds true even in 2020. Especially compared with the rest of the industry. In the first half of 2020, Bentley even registered a 2.8% increase in deliveries, while Lamborghini’s -22.1% is still way smaller than that of its direct competitors.

All in all, if this transaction happens, even if many enthusiasts might feel sad at the idea of Bugatti turning electric (which will have to happen anyway eventually), who better than Rimac can bring it into this new automotive era? As for the other two luxury automotive brands, as of now, it seems highly unlikely to see VW deciding to sell them.

Around a year ago, 2016 Formula 1 World Champion Nico Rosberg now turned into Entrepreneur/YouTuber published a video in which he talked about his intention to buy a hypercar. He then asked his audience for opinions on the options he selected (even though he already had his preference which was fairly easy to imagine, considering his passion for EV technology and innovation). Potential choices were Ferrari's latest hybrid SF90 Stradale, Aston Martin’s upcoming hybrid Valhalla, Swedish hybrid Koenigsegg Regera and the fully electric 1914 horsepower Rimac C_Two.

In one of his latest videos, he announced he is going for the hyper EV C_Two by Rimac. Considered his popularity among enthusiasts, this is another important endorsement for the Croatian company, whose founder and CEO Mate Rimac already appeared on Rosberg’s social channels on previous occasions.

I say “another” important endorsement because in its relatively short life (11 years) the high-performance EV manufacturer has already gained such an impressive reputation making it a really a one-in-a-million success story.

MATE RIMAC AND HIS COMPANY

In this era of companies identified in the media by a single person, Mate Rimac might be less known to the mass than prominent personalities such as Elon Musk (just to stay in a similar industry), but his achievements, dedication, and vision are every bit as impressive and inspirational.

He distinguished himself by winning several prizes in high school thanks to his final project of a glove engineered to substitute keyboard and mouse, in a period in which touch screens were not as common as today. His story in automotive, like that of other great companies, began in a garage turning a BMW E30, the second-generation 3 Series produced between 82 and 94, into a full-electric racing car.

From this humble beginning, and then through deals and investments to produce unique high-performance electric cars, the company has grown incredibly fast. Funding by established players has allowed the company to grow its workforce to over 450 employees in 2018. And now to already over 700, a number that likely counts also Greyp, the electric bicycle sister company established in 2013.

In an interview, Mate Rimac himself confirms how the company represents a quite unique example in the automotive business even financially, with 8 years of profitability out of 10, and a current solid position, on the back of the numerous investments and partnerships. In a highly competitive and capital-intensive industry like automotive, in fact, just looking since the year 2000s, there are numerous examples of big names, operating in various segments, that went bankrupt. And this is without even looking at start-ups.

*Rimac C_Two - Now called Nevera

The term hypercar usually indicates a vehicle sitting at the very top segment of the market in terms of pricing, performance, and customer experience. As one could expect, it is a market reserved for a really small crowd of wealthy. This market niche has become quite crowded in just a few years though.

Many new companies are entering this niche despite the Automotive industry being notoriously a sector with really high entry barriers. The reasons for this are various, along with the general direction of the mobility sector and environmental regulations. The nature of the EV itself lowers these barriers. As a product requires less engineering complexity and makes it easier to achieve eye-catching performance and numbers.

*Lotus Evija