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Editor’s note: A previous version of this story mistakenly stated that RYCEY was the stock ticker for Rolls-Royce Motor Cars Ltd. However, it is actually the stock ticker for Rolls-Royce Holdings plc, a separate entity from Rolls-Royce Motor Cars Ltd, which is a wholly-owned subsidiary of BMW AG. We regret this error and have corrected the article accordingly.
The ultra-luxury car market is experiencing a surge in customized car sales, with automakers such as Ferrari NV (NYSE:RACE), Lamborghini, Rolls-Royce Holdings Plc, and Bentley Systems Inc (NASDAQ:BSY) witnessing record-breaking demand for personalized vehicles.
What Happened: The ultra-wealthy are increasingly seeking unique, customized vehicles from these automakers, reported CNN on Saturday. This trend is driving substantial revenue growth for these companies.
Lamborghini, for instance, sold over 10,000 vehicles in 2023, a first in the company’s history. Ferrari saw a revenue increase of over 17%. The demand for personalized vehicles has led to a significant rise in sales of individually customized cars, some of which can cost double the base price of the vehicle.
"Personalizations, customizations, have actually been the key driver behind the better than expected earnings throughout the year," Gonzalez Lastra, investment partner with Tema ETFs, which operates a luxury goods investment fund. said.
These automakers cater to a small, ultra-wealthy customer base, with at least $30 million in potential spending money. This demographic is not only growing in size but also increasing in wealth, creating a lucrative market for ultra-luxury vehicles.
Why It Matters: The surge in demand for ultra-luxury customized cars is indicative of the growing wealth of the global elite. This trend is also reflected in the broader luxury car market, where Tesla overtook Bayerische Motoren Werke AG (OTC:BMWYY) as the top-selling luxury car brand in the U.S. in 2022.
This shift in consumer preferences towards luxury electric vehicles has also been seen in the success of companies such as Lucid Group Inc (NASDAQ:LCID), which despite production challenges, received the 2023 World Luxury Car of the Year award.
Moreover, this trend has also attracted new players to the luxury car market, such as Chinese EV manufacturer BYD Co Ltd, which is venturing into the luxury car market with a series of high-end EVs, including a Lamborghini-style supercar and an SUV with unique features. This indicates a significant shift in the luxury car market, driven by changing consumer preferences and the increasing wealth of the global elite.
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