During the coronavirus period, an interesting trend has formed in the automotive market: the demand for luxury cars has become higher than ever, and there’s an explanation to this.
The COVID-19 pandemic has caused an endless supply chain crisis and forced car manufacturers to switch to a smaller offering of more expensive premium products for profit.
Given a shortage of semiconductor chips and some other parts, the makers of mainstream vehicles, such as Volkswagen, Ford Motor, and some others, had to focus on the production of more aspirational models which are more likely to sell well.
And it works: Volkswagen, for example, could record profits in both Americas “for the first time in several years”, as they say.
Even luxury brands, such as Bentley or Rolls-Royce, have been experiencing an unprecedented rise and reaching new financial records, largely due to China and the USA.
The demand for their expensive products has increased. As we can see, high prices do not stop buyers, as they are ready to pay more for more luxurious and higher quality vehicles.
Ferarri also claimed it would not make affordable cars and would ramp up the production of more curated models. In turn, Mercedes-Benz is going to streamline its offerings towards more premium (and therefore more expensive) products.