New cars are more expensive than ever, with average prices in the US exceeding $50,000 for the first time in September, up 3.6 per cent from 2024, according to auto research company Kelley Blue Book.
Luxury cars are pushing that growth, according to KBB.
The average price of a vehicle from Porsche AG is $115,407, the highest of any standard-production automaker. A Ferrari, on average, costs four times that amount.
But luxury is slippery to define when you can spend $42,000 on a Mercedes-Benz or $114,000 on a Ford pickup truck. In a world of tailored cashmere socks and gold-plated toothbrushes marketed as luxury experiences, the term has become so ubiquitous, it has almost lost all meaning.
For cars, there’s no correlation between luxury and price; it’s not strictly about sheer horsepower or loads of carbon fiber.
Bloomberg spoke with executives at brands including Bentley, Bugatti, BMW, Pagani and Rolls-Royce to hear how they define luxury in the modern age. What became clear is that it encompasses more than former glory, as once-prestigious brands like Maserati descend into poor resale values and Jaguar remains comatose. It’s more than expensive materials, too, since advanced software often confers more status than fancy trim or carpeting.
And it’s not necessarily outre design, even if quiet luxury is already a thing of the past. Instead, car manufacturers are working hard to create tight-knit communities among their buyers and collectors, catering to their personal preferences and needs during every interaction and developing increasingly advanced ways to customise vehicles to reflect customers’ exact personal taste.
For many car buyers, luxury is about the one thing you can’t buy: minutes on the clock.
“Luxury is how we deal with your time,” says Adrian van Hooydonk, design director of BMW Group. It’s “the automaker being respectful of people’s time, and we want to make sure that the time spent in our product is rewarding.”
Others say luxury is about providing casual access to company leadership and craftspeople, allowing a familiarity that makes customers feel welcome whenever they’re on-site.
“We talk to them all the time,” says Christopher Pagani, head of marketing at Pagani and son of the founder. (It’s admittedly easier for the ultra-high-end automakers to stay in touch with customers. Pagani has made roughly 600 cars since Horacio Pagani opened up shop in 1992.)
The connection extends to potential clients. Ferrari wrote the blueprint on how to generate more admirers than owners, keeping production limited and making existing customers wait years for the privilege of buying a special model.
