Car makers

Luxury car makers look to diversify to buffer from the economy

Isaac Mostovicz writes that luxury car makers are having to diversify and look to new markets if they are to insulate themselves from future financial turmoil...

Luxury car makers are increasingly showing two faces to consumers – one mean, one green – according to this recent Wall Street Journal post titles “Retooling Luxury Cars for a Younger Generation”.

The article explains that as well as building an array of high-horsepower performance cars, makers are also bringing out ‘green’ cars such as the electric BMW i3 – a concept car made of aluminum and carbon fiber. These vehicles will no doubt appeal to younger, more environmentally conscious luxury consumers who still want to buy premium goods.

BMW i3

Many of these new ‘green’ vehicles are built in a different manner, requiring money to innovate, which in turn requires customers to keep buying traditional cars, as the article highlights:

“To pay for expensive no-petroleum car technology, European luxury marques must keep their traditional clientele happy and [paying] big money for fancy cars for as long as possible.”

Luxury car brands are now more than ever looking to Asia for growth, where there is growing demand for these vehicles, and they hope that this will insulate them from any possible dips in European spending. I have written before about the growing luxury market in Asia, particularly in China. Diversification is now important in insuring that brands are safe from any downturns, although the market looks to be recovering, set to rise this year by almost thirty per cent.

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