When there is a major economic shift, it is natural for the market to change with it. Many may look for places to cut corners or save money, but another adjustment is happening simultaneously, which is less obvious than pinching pennies. There are more luxury cars being bought than ever before.
The luxury auto market has been growing over the past few years. There was a high of 17.3% of shares of new vehicles sold in the United States, which J.D. Power reported. The sales of luxury vehicles have increased due to savings from the pandemic and an expanding upper class. Many of those in this expanding affluent community are from a younger generation who earned their money from tech and other industries. They are buying in now that they have the money to join these name-brand clubs. According to CNBC, the companies that service the ultra-rich have reported strong sales and predict more increases in their forecasts.
While the price of a new car has gone up during the pandemic, mainly due to supply issues and chip shortages, among other factors, this has not deterred the luxury car buyer. If anything, it has encouraged customers to turn towards the upper-scale market, like a BMW or Mercedes-Benz. This uptick in luxury sales is because the options are greater in the luxury car market, the vehicles come included with features that mainstream models do not, and customers feel they are receiving a good deal. It is as good of a time as any to buy into a brand name. The numbers prove this point. In 2021, Tesla achieved the milestone of selling 2 million EV vehicles. Even super-premium brands, like Bentley, Ferrari, and Lamborghini, have experienced an increase in sales. Auto manufacturers have been noticing the shifting trends in the market and are investing in the future. Cadillac will release the Celestiq, a $300,000 electric vehicle, by late 2023. The Mercedes-Benz Group is shifting gears to focus on autos above the $100,000 price point.
Cars have always been a marker of the life of luxury. Driving around in an expensive vehicle feels like the ultimate sign of wealth. Now, many American customers will experience that rush. Observing how automakers are adjusting to this new luxury norm, it does not seem like they will be pumping the brakes on this plan anytime soon.