General

Future of the luxury car market – Top 5 trends to watch out for

Luxury-EVs

The luxury car market has seen a smart revival lately. The new age consumers are driven by all kinds of luxuries from comfort to convenience to the best entertainment and safety features coupled with advanced technology like ADAS, the latest electrification ado and so on. The subtle shift from need to want a premium car backed by the big names is the reason behind the segment’s steady growth.

Luxury car sales continue to grow in terms of profit generation or the cognitive drive that drives a purchase decision. This is why:

Luxury has become a global trend

Judging by the shifts in geographic formulation, non-traditional markets have gained momentum. According to a McKinsey report, the Asia-Pacific region is expected to have the highest growth charts between 2021 and 2026, driven by the increasing number of ultra-high-net-worth individuals (UHNWIs) and high-net-worth individuals (HNWIs). ).

Percentage growth of the UHNWI population in Asia is forecast to have been 33 percent, compared to 28 and 27 percent in the United States and the European Union, respectively. HNWI population growth trends should outpace those of the UHNWI cohort, with an increase of more than 60 percent in Asia, compared to less than 53 percent in the European Union and the United States between 2021 and 2026.

EVs and e-SUVs are becoming the dominant factor in premium luxury classes

Battery electric vehicles will dominate all segments of the luxury segment by 2031. Consumers today are very open to sustainable alternatives and research indicates that EVs are in high demand with affluent customers. However, the acceptance rate will vary taking into account the price aspect of the vehicle. Global figures suggest that more than 70 percent of current owners of premium and luxury internal combustion engine (ICE) vehicles are willing to switch to EVs on their next purchase, the report said.

The demand for SUVs has been constant across all segments and the trend is not going away anytime soon. SUVs are also becoming more practical in a way that they are electrified. In terms of market share, SUV sales are likely to increase from less than 25 percent to 40 percent between 2021 and 2031. Meanwhile, shares for other popular segments such as sedans and sports cars are likely to fall to 20 to 40 percent, respectively, in 2031, from 25 and 50 percent in 2021, the report suggests.

As many wealthy buyers want more resilience given the increasing regional applicability of SUVs, about 50 percent of premium and luxury car buyers prefer SUVs as their next purchase, the report adds.

Evolving go-to-market towards a more consumer-centric approach

Living in the ever-changing times, managing ongoing engagement and personalized experiences for the customers is a must for any industry. There is nothing like nightlife luxury and exclusivity!

Luxury OEMs have understood the importance of providing end-to-end customer experiences, as opposed to traditional franchise dealers who lacked the seamless omnichannel experience, resulting in unconvinced customers. Research shows that less than 2 percent of customers view the dealer approach as “ideal” in market segments.

As luxury OEMs have adopted a go-to-market approach, results have begun to change and it is no surprise, then, that adopting the direct-to-customer approach and actively innovating to meet the evolving needs of the customer, has yielded a return on sales by more 5 percent. McKinsey’s analysis shows that a leading EV specialist using a DTC go-to-market model spends about half the cost of sales than an established OEM.

Wealthy consumers and luxury market; an age old band

The fact that the increase in more millionaires (and billionaires) will certainly affect revenue growth. The luxury car growth network, which is now navigating a new route from North America and Europe to Asia and the Middle East with the strong geolocation and technological shifts, points to a demand for the higher end cars, which in turn will be new entrants into luxury. market. Report analysis suggests that growth in luxury car segments will vary by price range, with higher-priced brands showing slightly more growth.

Bringing forth the up-to-date luxury car brand

The luxury cars of the 21st century need to evolve as quickly as possible and this requires learning from the competitors. Keeping up with what the market demands won’t work anymore, because it’s the time when the automotive players need to think one step ahead of what they intend to do and set benchmarks for the others. Custom-class coherence and a mix of experience diversity is what the success of the luxury car market demands.

According to the report, the luxury auto industry has documented 20 percent improvements in customer satisfaction and 10 to 15 percent increases in sales conversion performance. Employees are also embracing it, as companies see a 20 to 30 percent increase in employee engagement, and the process is usually labor neutral or better.

The luxury sector manages to differentiate itself from the mass market and continues to enjoy profitable growth despite all the undulations.

Also Read: India used luxury car market exceeds 60,000 units sold, up 20 percent says Luxury Ride

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