Luxury cars speed out of the recession

Isaac Mostovicz writes that even concern around tax officials won't dim emerging markets' enthusiasm for luxury vehicles...

A recent blog post on JanusThinking.com looked at the seeming imperviousness of the Chinese luxury goods market to the economic slowdown.

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The Financial Times reports that the luxury car market is travelling in the same direction, with cars speeding out of showrooms despite challenging fiscal times.

 

Carmakers’ robust financial results seem to demonstrate that it is the emerging markets’ taste for luxury vehicles that are driving this trend. Bentley saw 37% sales growth last year, with BMW, Mercedes-Benz, Audi and Porsche also firmly in the driving seat when it came to sales outside the Eurozone.

 

Europe, however, is not seeing the same level of demand. Austerity measures, taxes on high-income earners and a firm crackdown on tax evasion mean slowing sales in the sector.

 

The blog claims that in Italy, tax evaders are reportedly returning luxury cars such as Ferraris to avoid the unwelcome attentions of tax officials – it relates one anecdote of a wealthy driver in Milan keeping his tax returns in his car to prove to suspicious police that he’s paid the necessary dues.

 

The slump in luxury sales adds pressure to the Italian automotive market as the economy continues to slow down. But whether popular in Italy or not, it’s clear that luxury cars like Ferraris remain firmly in fashion in emerging markets.

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