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15 February, New York, USA, 2021 – The global luxury vehicles market is expected to clock 6.31% CAGR during 2021-2027, as demand for tangible luxury propositions like a clean environment promises to drive growth. According to the Economic Times, luxury cars witnessed a 44.3% growth during the first three quarters of 2020, as opposed to 40% growth in the previous year. One of the top-most luxury vehicle brands, Mercedes Benz sold nearly 200,000 vehicles topping total vehicle sales, while top models like Lexus sold over 75,000 during the third quarter of 2020 achieving the highest model-based total sales. The growth came as a surprise to many as the covid-19 pandemic had resulted in bleak sales for general vehicles in the same year.
This certifies the conclusion from Thai researchers about the purchasing patterns of luxury vehicles. The Thai researchers investing in the rising demand for luxury cars in Thailand concluded that products in themselves had very little to do with their purchase. On the other hand, large wealth, social, and individual psychology played a significant role in the purchase of luxury vehicles. The researchers also discovered that buyers with more than BHT 1 million per month income, largely male, and highly educated consumers valued luxury vehicle purchases more highly. Individuals with master degrees had more inclination to purchase luxury vehicles as opposed to those who had little education. The growing appeal for luxury in Asia Pacific region, the growing disposable income, and high individual conformity to social norms of lifestyle will drive major growth for the global luxury vehicles market.
Growing Demand for Electric Vehicles Promises Major Adoption in the West
According to the Economic Times article, Tesla sold over 195,000 vehicles in the first nine months of 2019. Moreover, out of the top 16 brands, Tesla was the only company to register positive growth for straight nine months. The company’s growth rate stood at a notable 21.4% YoY. Furthermore, according to the International Energy Agency, over 9 million American consumers delayed their vehicle purchase in 2019, due to Covid-19, and the prospect of electric vehicles on the horizon. The birth of electric vehicles has cast a major shadow of uncertainty in the luxury vehicles market for two main reasons.
On one hand, electric vehicles promise many feature upgrades like automated driving experience, laden with never-before-seen digital immersion. On the other hand, many consumers of luxury vehicles are sensitive to the sustainability of the planet. For example, according to a study published in the journal of brand management, millennials across the West, Asia Pacific, and other countries view luxury contrary to sustainability. Hence, in order to cater to this largest consumer population, EVs will likely remain key to drive growth in the luxury vehicles market. This will likely take place in the near future, as key brands like BWM, Mercedes Benz, Volkswagen, GE have announced premium electric vehicles, along with news about tech companies like Uber, Apple also launching their premium EVs. The growing entry of major vehicle manufacturers, and growing demand from consumers for EVs, and their high savings on fuel will drive major growth for the global luxury vehicles market.
Growing Scope for New Branding in Luxury Solutions to Drive Growth
One of the biggest restraints in the growth of the luxury vehicle segment remained the lowering demand from consumers in the west, thanks to lowering disposable incomes and lowering attachment to luxury branding of vehicles. According to recent Pew studies, the auto debt for average household continued to decrease for a decade till 2017, as consumers increasingly associated vehicles with liabilities as opposed to assets like before. The rising demand for EVs promises to change this perception in key markets like the United States. The Tesla EVs have already been a major boost for the luxury EVs in the US, while EVs promise tangible value-based offerings like a cleaner environment to consumers.
According to a study published in the economics of transportation journal, studies conducted in Texas reported that the average consumer in Texas was willing to pay $10,000 more for level 4 automation in EVs. Similar trends were reported across Europe, as men reported nearly $2000 more worth for EVs as opposed to traditional vehicles. The rising subsidies associated with EVs will also provide them with a burst of momentum in the initial stages, unlike other vehicle segments. The growing demand for EVs, the increased value proposition, and growing features like full automation will drive major growth for the global luxury vehicles market.
The Luxury Vehicles Market Report is Segmented as Follows:
Vehicle Type Outlook
Drive Type Outlook
The Middle East and Africa
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