As cities push for alternative mobility, bling car business booms

By DPA | 9 May 2019


GENEVA: They are some of the world's top-performing cars, with high-quality engines and cutting-edge technology under the bonnet.

However, if you were actually the owner of one of these luxury cars, it is very unlikely that you would actually want to go anywhere in them - at least according to Bugatti boss Stephan Winkelmann.

"Today our customers do not use the vehicles to drive from A to B, but to drive from A to A," says Winkelmann.

Impractical? Maybe. A sustainable business model? Almost certainly.

In the face of growing industry pressure to adapt to declining consumer interest in cars, the big luxury brands recently turned up at the Geneva Motor Show acting like business as usual.

While major industry topics such as shared mobility concepts and automated cars are in the spotlight, luxury brands like Bugatti, Ferrari, Maserati and Rolls-Royce have a different audience in mind.

launch of the world's first super Sport Utility Vehicle, the Lamborghini Urus.


Those who can afford a car that can easily cost as much as a one-family house are interested in only the very best in motoring, and the good news is, this group seems to only be getting bigger.

"There are more and more rich people who want to treat themselves to something special," says industry expert Peter Fuss from the consulting firm Ernst & Young. "And they want to show that too."

As a very physical reminder of their exclusivity, the brands at the show - including Lamborghini, Bentley and Russian luxury car brand Aurus - have their exhibition stalls protected by glass fences.

While visitors to other brands can stroll around the vehicles as they wish, these barriers are a reminder that not just anyone gets to take a ride in these cars.

But despite this, these brands are still in high demand.

For example, Bugatti delivers only 70 to 80 vehicles per year, with prices starting from 2.5 million euros. Yet it sells out fast. "We have no shortage of demand," says Winkelmann.

93642-a-porsche


"The Divo costs 5 million (euros) net, 40 pieces are planned, and all are sold out. La Voiture Noire is a one-of-a-kind, sold for 16.7 million euros. Then we have a special series of 20 copies, each piece 3 million euros, and each one is sold."

Lamborghini boss Stefano Domenicali is even more bullish in talking about his consumers and their demand for high-end vehicles.

In 2017, the brand delivered 3,815 cars worldwide, generating around 933 million euros in sales. On average, that's almost 245,000 euros per car.

In 2018, there were already 5,750 vehicles - and in 2019, around 8,000 are set to be produced, with capacity at the Italian plant significantly increased.

"There's one side of the younger generation for whom a car is simply a mobility tool," says Domenicali. "And there's the other side, in our niche of course, who wants to be proud of having such a car."

However, despite the rising popularity, a Lamborghini should remain a Lamborghini - meaning that being rare and expensive is part of the brand appeal.

"It's about finding the right balance between growth and exclusivity," says Domenicali. "If we just wanted to boost sales, that would be easy."

Bavarian Edition by Mulliner (HERO)


Especially the demand for the new Lamborghini Urus SUV is incredibly high. "But we do not want to go (further) that way," says Domenicali.

Compared to Bugatti, Lamborghini's numbers are already enormous. But for comparison, Porsche takes some two weeks to shift 8,000 vehicles.

Industry expert Ferdinand Dudenhoeffer also sees the premium and super-premium manufacturers in no danger of suffering from the declining interest in cars - provided they still manage to arouse desire and ownership pride.

Bugatti boss Winkelmann does not want to categorically rule out that the brand could eventually position itself a little differently, and explore different, possibly even more affordable,vehicle types.

Founder Ettore Bugatti once built every kind of vehicle, and Winkelmann also believes the brand has the potential for another model range.

"The opportunity exists, and if we were to be present in a different category of vehicles, then of course we would also have the chance to build cars suitable for everyday use - and then you could imagine offering mobility services as well."

Perhaps this is a cautious consideration on Bugatti's part, acknowledging that expensive cars alone will not always be a guarantee for big profits.

According to Dudenhoeffer, it can vary in results for many companies, with manufacturers seeing ups and down in the the luxury car segment. While Ferrari made 69,000 euros in operating profit per car in the first half of 2018, Bentley in each case made only 17,000 euros.

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