While the pandemic had a startling effect on the auto industry from factory shutdowns to sudden demand, the ultra-luxury car market with brands like Bentley, Lamborghini, Ferrari, and more have been flying off the shelves. It’s no secret that there has been a considerable surge in billionaire money since the pandemic started in 2020.
Almost $1.8 trillion has changed hands overall, which is a considerable gain of over 60% during the pandemic. While most of the population is facing job losses and eating into their savings, the rich have been drowning in wealth, spending a lot of it on luxury cars to keep busy during the pandemic. Be it a used Mercedes-Benz for sale or a new Rolls-Royce, the sales of luxury cars has been on a rise recently.
The luxury market has grown considerably over the years, with most manufacturers moving to luxury SUVs following the current trend. Recent entries like the Lamborghini Urus, Bentley Bentayga, and even the upcoming Aston Martin DBX are racking up reservations by the thousands.
While the industry slumped by 10% last year, it recovered quite quickly by the end of 2020 and kept on rising to high levels. But what’s more interesting is the number of luxury cars on sale. According to some recent analytics, cars costing more than $80,000 doubled compared to pre-pandemic levels, while those costing more than $100,000 rose by 63%. This current rise in luxury car sales can be directly linked to the wealth rise among the rich during the pandemic.
From a booming stock market to cryptocurrency, the rich have gotten a lot wealthier. Because of the volatile stock market, investors are focusing on hard assets like classic cars. This has led to a sudden increase in customers at auction houses that specialize in unique models like the McLaren Senna, Bugatti Chiron, and more. Because they can’t spend their money on trips and other lifestyles due to travel restrictions, it’s a fair assumption that most of them bought supercars and opulent cruisers instead.
It is predicted that the US luxury car market will grow substantially in the coming years to almost 7 million units by 2024, and is projected to reach $6.9 billion in revenue by the end of this year.
The pandemic has also changed the way cars are sold and had a severe impact on the car buying process. Most customers have started shopping online to avoid crowds at dealerships, further streamlining the process.
More than a means of transportation, ultra-luxury cars are often seen as a status symbol and are usually led by brands like Bentley and Ferrari. It’s not just the US. That’s cashing in on the boom, China is also lapping up a lot of supercars, accounting for a considerable chunk of total sales. Because of the sudden economic growth in China, sales have doubled in 2020, and China has also become one of Lamborghini’s largest markets.
However, like the rest of the auto industry, the ultra-luxury car market also had to deal with several production issues. Brands like Bentley had to shut down their factories for several weeks, and couldn’t push out cars at the normal pace even after the factories were reopened. Bentley also recorded the highest order bank since 2003.
Bugatti, a brand that produces a limited number of cars annually, did incredibly well during the pandemic and recorded its third record-breaking year in a row.
German brands like Porsche are also cashing in on the boom, marking 2020 as an “exceptional year” for the company. Their revenue stood at a 90-year high of $34 billion in 2020, increasing more than $110 million compared to 2019.
Not just because of the pandemic, the sudden rise in multi-millionaires around the world started last decade, and most luxury car manufacturers were caught off guard due to the sudden rise in demand for luxury cars. Brands that usually sold a limited number of vehicles every year are now shifting thousands of units. In fact, luxury car sales are now faster than in the regular market. Registrations for high-end luxury cars have been continuously rising since 2009 and are currently at their peak during the pandemic, indicating the massive market growth and an overall rise in wealth.
Most of the luxury cars on offer are usually made to order, and offer plenty of options, taking months to build. But, most dealers usually keep some models at the dealership for quick sales. In the current market, customers are buying out all these models since ordering a new one takes a lot longer than usual, leaving dealerships without any stock.
Another unusual aspect of the current boom in luxury car sales is the demographic of customers buying them. Brands like Bentley are usually bought by older businessmen, but because of the tech boom recently, most of the buyers are younger than usual.
If we take a look at some numbers, Bentley has sold more than 10,000 models in 2020, a record number in recent history. The most popular model for the brand is the Flying Spur sedan, which captures the essence of British luxury and combines it with German engineering. The newest generation launched recently in 2019 is the biggest hit so far.
Of course, some manufacturers fared better than others during the pandemic. Due to a long backlog of orders and no new models, companies like Rolls-Royce saw a sales slump similar to Ferrari. Although, most of them were able to catch up by the fourth quarter despite the pandemic-related issues. Because Rolls-Royce is seen as a manufacturer that builds models up to customer specification right down to the stitching, the orders were filled up for 2021, resulting in limited sales.
Even brands like Aston Martin who were experiencing a sales slump in recent years have seen higher sales, and have allied with Mercedes-Benz. Some models like their Valkyrie supercar are priced more than $2 million each, giving them more profit than selling several of their regular models like the Vantage and Rapid.
Lamborghini also profited a lot during 2020, and recorded the highest sales ever in two consecutive years, selling more than 7,000 units last year.