Luxury Car Market Trends

Growth Drivers

• The Rising Number of Mega-High-Net-Worth of Peoples Across the World - Although there is no specific legal definition for a mega-high-net-worth individual (UHNWI), people with assets of at least USD 30 million are frequently considered to be UHNWIs. Importantly, this money has to be invested in assets that can be gained from them. Although there are comparable individuals, the most prevalent of which is the high-net-worth individual, mega-high-net-worth individuals belong to a different class altogether. The millionaires must have a net worth of at least USD 1.5 million and USD 750,000 in investable assets to qualify for this group. It's crucial to remember that investable assets must be net of obligations to meet either of these criteria. Therefore, people who have large debt loads and ambitious investment goals might not be able to attain their desired tier.
• Rising Involvement of Younger Generation - The market for luxury goods, for instance, luxury footwear, dresses, and cars, is driven by the growing involvement of female and younger consumers. Their consuming habits are also driving the market's evolution, offering companies in the market new chances as well as difficulties. BMWs are the most common first car among Gen Z, with nearly one in six of them having owned one. Additionally, 1 in 12 respondents stated that their first car was an Audi.
• The Increasing Buying Power of Women Across the World - "She Power" is becoming increasingly important in the economy. In 2020, a survey curated and found that 89% of women worldwide reported being in control of or sharing daily buying requirements, compared to 41% of men. In 2019, women accounted for nearly USD 31.8 trillion in global consumer spending. There is a growing trend of female consumers participating in the automotive market. An American poll indicates that 65% of new car purchases are made by women. According to a Chinese survey, women spent more on cars in 2020 than men did. Moreover, a sizable portion of purchases in the luxury car market are made by women. According to a premium automobile manufacturer, in China in 2021, 20% of its new cars were bought by women.

Challenges

• The High-End Costs of Luxury Cars - On account of their luxurious and avant-garde characteristics, luxury cars are costly. The cost of producing cars with luxurious amenities and extras is far more than the cost of producing the cars itself. Luxury automobile sales are extremely low because a significant portion of the proceeds from sales goes toward funding the cars' advancement, making them costlier. Thus, it is anticipated that the high price of luxury cars will impede market expansion.

• Uncertainty in the Future Purchasing

• Lack of Technicians Who can Repair the Luxury Cars