Introduction
Luxury vehicles are terms used for vehicles that can be defined as those that proved the most comfort, and have the most amounts of features which are not particularly necessary in the vehicles at a high amount of the vehicle price. The vehicle is produced with the highest precision, care and high quality equipment and materials.
The luxury car can be broadly categorized into three main segments: Low-end luxury cars, Mid-end luxury cars and High-end luxury cars
The rich customers are scaling down to smaller, efficient and more eco-friendly cars whereas the customers from BRIC countries have gone for up market models owing to their growing disposable income.
Globally, Covid-19 has hit production of many luxury car automakers which led them to airlift spare parts from China to continue their regular vehicle production. Luxury car company officials said that over 95 per cent of its Tier 1 and Tier 2 suppliers in China are still open, but at a reduced capacity.
Table of Contents
Market Overview
The global luxury car market is expected to grow to $701.49 billion by 2025 at a CAGR of 9.3%
The COVID-19 pandemic has had a profound effect on the luxury car market directly in the short term as sales and production have witnessed a decline in 2020
A significant rise intangible luxury offerings in vehicles, shifting consumer preferences from sedans to SUVs,
The introduction of luxury cars loaded with electric engines can present lucrative opportunities for the market.
Key Trends
The cars segment have been an aspirational product for a long time, luxury cars sit at the top with a 40 per cent of the total OEM profits coming from these
Around 73 per cent of luxury car buyers start their buying journey online, compared to 62 per cent of mass-market customers. This has been driving the luxury automakers to focus more on their digital activities.
In the coming decade, superior connectivity will become a decisive factor for the luxury car market across the world.
Key Market Players
The market is dominated by global vendors like Bayerische Motoren Werke(BMW), Jaguar, Mercedes - Benz, Volkswagen and Tesla.
Growth Drivers and Challenges
Major luxury car manufacturers launching electric variants of their luxury vehicles due to growing environmental concerns and increasing fuel prices, which is also likely to accelerate the growth of the luxury car market over the forecast period.
The rapid increases in tangible luxury offerings in vehicles as well as the rising disposable incomes of consumers are another driver flourishing the growth of luxury car market, which in turn is raising the growth of the target market.
In the world's single biggest luxury car market, the powertrain is the first priority for the buyers, followed by driving performance, brand, connectivity and overall experience of ownership.
Budget cars are developed and launched as the strategic business units of main parent auto manufacturer. Automobile manufacturers saw a decline in the sales of its luxury segment because of providing advanced technologies to budget cars for increasing its sales.
Different regulations like the emergence of stringent emission norms, fuel efficiency norms, EV policies are impacting the industry significantly.