Filling The Gaps

Tomorrow I have a presentation about Luxury Cars Market, structured using the agenda mentioned in the previous post. If someday you need to make a similar presentation choose something much more broad (“new cars market” for example) as especially about the luxury vehicles market is a bit hard to find what you are searching for. (like separate data)

I`m not going to put the whole presentation (I`m not so good :)) but just some passages (a total mix ) which could be interested for people who don`t have knowledge in this area, as me for example /a typical girl / At the end I `ll put some links to articles one may find interesting.

Characteristics of the market

–> Bigger emphasis on comfort, appearance, and amenities such as technological upgrades and higher quality materials

–> Produced in smaller numbers than more affordable mass-market vehicles (e.g Ferrari, Lamborghini, Porsche)

–> Combination of price, design, comfort, and prestige that can be used to help define the term

–> It is difficult to well define what is ‘luxury car’; many vehicles (such as Yukon or Chevrolet Suburban) are moderately expensive even if they haven’t many of the amenities of other luxury vehicles. As well, some vehicles meet the characteristics of prestige and price but they don’t offer enough degree of comfort (e.g. Chevrolet Corvette)

Manufacturers

• Jaguar, Audi, BMW, and Mercedes-Benz are the traditional luxury manufacturers, but manufacturers such as Saab, and Volvo are now considered by many to fall into this category.

• Lexus has met with limited but growing success across Europe even though it is a top selling luxury carmaker in the United States

• At the top of the segment, Bentley, Maybach, and Rolls Royce are generally considered more prestigious than any other luxury car ands

• Aston Martin, Porsche, Maserati and Ferrari belong to the particular segment of sport luxury cars

Some good trends:
- aging and more wealthy society (“ baby boomers” entering their top earnings stage for instance)
- globalization (factor that probably you could put everywhere with its advantages and disadvantages)
- trends, fashion, possibility f “personalization” of a luxury car (design, extras etc. )
- new technology
- development of economies

Some bad trends:
- licenses and regulation
- growing prices of raw materials
- shortage of oil and gas
- pollution regulations ( EU new emissions)

European leaders: (cars in general)

Volkswagen Group: VW, Audi, Bugatti, Lamborgini, Seat, Skoda and VW commercial vehicles

BMW Group: BMW, Rolls- Royce Motor Cars

Daimler- Chrysler: Mercedes- Benz, Daimler trucks, Daimler Buses, Mercedes- Benz Vans

• VW: 10,3 % growth, 2007
• BMW: 7,7 % growth, 2007
• Daimler- Chrysler: 2 % growth

Ultra luxury and ultra fast cars (Bugatti, Lamborghini) compete through offering low number of exclusive products

Some important entry barriers:
- brand consciousness
- environmental regulations
- competition
- taxes and duties and etc.

Concerning country choice as a place to invest, you could compared some crucial factors for the industry and compared 4-5 countries. We choose Germany as the birthplace of the automotive and as a country which is leader in producing high-quality vehicles. In one of the listed articles at the end of the post it was mentioned that every 1 out of 3 cars in Germany is from premium quality. For comparison with USA – there every 1 out of 10 is a luxury one.

Actually even though experts forecast that the market will grow, the new EU C0.2 emissions are quite big problem, standing in front of the German`s producers of luxury cars because the latter are not fuel-efficiency cars, but big and powerful ones and that`s where Germany has always be leading (country of origin).

I don`t know what should be done. I read that somebody from the executive body of Porshe has said that Porshe could not fit the new regulations and will not able to do it at all. However, with more efforts in R&D sector, there should be something companies could make. Anyway in my opinion German`s luxury cars producers should change a bit their strategies. Of course that a buyer of a new luxury car is more quality than price-sensitive and so far there`s market for luxury vehicles as it`s not also the technology, but also the prestige they give you, but I would like to beleive that soon it will be more important not the prestige and the life style but the society and what could be done more concerning the global warming process, the pollution etc.

Sources you could find more information:

The Economist- Germany`s car industry: The big car problem

BBC News: German car firms corner luxury market
AUTO spectator: home page plus Mercedes-Benz Cars Posts Best Sales Year Ever, BMW Group Increases 2007 Worldwide Sales by 9.2 Percent,
Automotive Industry- overview
BBC: The German Car Industry
German Auto Industry Calls EU’s CO2 Diet Unworkable
German Association of the Automotive industry- VDA