So much for scaling back. The world’s rich and elite — or those who just want to appear so — have been cracking open their wallets in a big way lately, and luxury automakers are the beneficiaries.
Bentley Motors announced that sales in the first quarter of 2013 were up 26% globally compared to the same period last year. Sales in the Americas increased 35% for the same time frame. The automaker, which is known for high-price, high-end models like the new Flying Spur (MSRP from $200K), still has a very small portion of the auto market. Just 2,212 new Bentleys were delivered to customers worldwide during the first three months of 2013, compared to 1,759 the year before.
Even so, Bentley isn’t a mass-market type of operation, and the automaker is on pace for what it would consider a huge year. In 2011, for example, global sales hit 7,003, a 37% increase over the previous year. This year, Bentley should easily top that 2011 sales total.
More importantly, in terms of gauging the state of the global economy (and the willingness of the rich to drop big bucks on plush, pricey new toys), it’s noteworthy that Bentley is hardly the only luxury automaker doing brisk business lately. USA Today reported that Porsche just had its best January ever for sales, up 32% compared to January 2012. Once February and March sales totals were in, Porsche Cars North America announced it had experienced its best-ever first quarter, with 9,650 vehicles sold, a rise of 35% compared to the same period last year.
Audi also said that it just had the “strongest first quarter in its history” with 369,500 units sold, up around 7% from the January-March period in 2012. Jaguar Land Rover sales were up 17% in the first quarter, according to the Guardian.
Given the numbers, it’s unsurprising that expensive new luxury models have been flooding auto shows. A recent New York Times piece offered some explanation for the boom in luxury car sales:
The surge in the luxury market, analysts say, is a sign that wealthy consumers sense that the nation’s financial health is solidly improving in ways that reinforce a willingness to splurge on expensive new models.
“A lot of luxury customers were waiting to see how things would shake out in the economy and the stock market,” said Alec Gutierrez, an analyst at Kelley Blue Book. “But they are becoming more and more confident.”
Among the many trends in new cars today, one that’s undeniable is the rise in fuel economy. In March, the average car sold in the U.S. got a record-high 24.6 mpg, compared to an average of around 20 mpg five years ago. The trend is a reflection of automakers’ efforts to reach tough mileage goals set by the federal government, but it’s also obviously a signal that consumers are concerned about fuel costs and want better mileage for the buck. Automakers have even taken to bragging that their engines are getting smaller (and therefore more fuel efficient).
On the other hand, the Wall Street Journal described a trend for a certain breed of buyers to go in just the opposite direction. Rather than cutting weight and engine size to boost fuel economy, some luxury automakers are pushing models with gratuitous power. Think 500+ horsepower and 0 to 60 mph in under 4 seconds.
These vehicles, like the $90,000 BMW M5 sedan, unsurprisingly get poor mileage (mid teens). What’s more, the federal government levies special “gas-guzzler” taxes on such vehicles, which can add $1,000 to $7,700 to the cost of the car. Chances are, if you’re in the market for a high-performance luxury car, price and fuel economy probably aren’t top of mind. So why are buyers drawn to this elite market? Per the WSJ:
The appeal is a combination of exclusivity and the pride of owning a driving machine capable of scorching up a racecourse—even if it never does.
“It’s not, ‘I use it,’ it’s ‘I could if I wanted to,’ ” says Barry Hoch, general manager of product planning at Audi’s U.S. arm.