Ferrari

Luxury carmakers enjoy a surge in sales

Isaac Mostovicz writes that luxury carmakers are enjoying strong sales in emerging markets...

Which car you drive has long been established as a symbol of status. That doesn’t look set to change, and in emerging nations where consumers are eager to make a statement about their newfound wealth luxury carmakers are enjoying strong sales.

According to a recent article in the Economic Times, China is the global driving force for premium luxury cars as consumer enthusiasm fuels sales. This is perhaps not surprising given China is close to having one million millionaires with a personal wealth of 10 million yuan or more – up 9.7 percent from last year.

At the Shanghai Auto Show last week, British car manufacturer Aston Martin claimed that all of its five One-77 cars for the China market were ordered even before the Auto Show opened to public, demonstrating the strength of the demand.

According to Zhong Shi, a Beijing-based auto analyst interviewed for the Economic Times article, “Chinese consumers love to show off their wealth by having unique luxury products or getting them one step ahead of the others.”

This clearly reflects the habits of a Lambda personality type who are likely to make choices based on how it will help them stand out and benchmarks them against others. This is in contrast to a Theta personality type who, instead of wanting to stand out, would seek to contextualize themselves, and so perhaps would not always be driving demand.

Stephan Winkelmann, president and chief executive officer of Italian super sports carmaker Lamborghini, says China will be Lamborghini’s biggest market this year, after its sales nearly tripled year-on-year in 2010. Other high-end carmakers such as Ferrari have similar expectations.

For an insight into how luxury carmakers evolve over many generations, and continue to meet emerging market demand, you may be interested to read this interview between the CEO of Rolls-Royce, perhaps the most renowned luxury carmaker of all time, and Forbes India.

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In times of crisis, bank on luxury

Isaac Mostovicz writes...

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As the financial crisis threatens to wipe out the global financial system, times are tough for Wall Street and Main Street alike. How is the crisis affecting the luxury goods industry? According to Bain & Co, while certain niches have seen a dip, the luxury marketplace as a whole remains increasingly strong in the face of economic collapse.

Moet & Chandon, for instance, views the current financial chaos as just a hiccup in the long history of political, social, and economic crises—all of which the Champagne house has survived. Luxury products, they argue, are the most desirable during times of distress, where people hit hardest need something to hope for while those of extreme wealth will always have cash to spare for indulgences.

Similar sentiments ring true throughout the luxury market. Another article points to stability of the luxury car, where interest in Ferrari’s new $250,000 car hasn’t waned a bit, and Bentley sales grew by 20% last year. Luxury car companies are also moving away from countries worst hit by the crisis, focusing on expansion into emerging markets like India, China, and Russia.

However, such optimism may be subdued if the crisis continues at this rate. Forbes predicts that while luxury retailers avoided the first downturn, they are “far from immune.” The article predicts that upscale chains (such as Sak’s and Neiman Marcus, who saw September sales fall 11% and 16%, respectively) may need to discount products up to 20% over the holiday season.

What does this mean for you? While the crisis may demand a closer eye on your wallet, don’t think luxury will go to the wayside—it may just be on sale.

Dennis says of this article...

Nice article!
Thanx for posting it.

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Comedy around Ferrari

Isaac Mostovicz writes...

What happens when you put together a $1.5 Ferrari Enzo (one of 400 made) and a comedian more adept at one-liners than staying within the lines? Click on the video below to find out (from a charity fundraising event on March 26):

The comedian, Eddie Griffin, was okay. The owner of the Ferrari, however, was not.

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