Categories: Cars

US Luxury Car Market Will Nearly Double to $215 Billion by 2035

An exclusive new study led by Boston Consulting Group with duPont Registry Group projects that the US luxury and exotic automotive sector will grow from approximately $110 billion today to as much as $215 billion by 2035, underscoring the category’s rising influence within an increasingly interconnected luxury-lifestyle ecosystem.

According to the report, the US total addressable market for vehicles priced at or above $100,000 is projected to rise by a compound annual growth rate of 5 percent to 7 percent through 2035—reaching a market value of between $180 billion and $215 billion. Sales of used vehicles are projected to grow up to 1.5 times faster than those of new ones, thanks to high new automobile prices and an ever-growing supply of secondary market inventory.

While buyers remain enthusiastic about luxury and exotic automobiles, preferences are changing across the customer journey, according to the report. Players, including brands, dealers, and marketplaces, will need to adapt to these changing preferences to secure their market position and capture future growth.

By interviewing leading stakeholders and surveying over 400 current and prior collectors and prospective buyers, the report’s authors found that, while buyers remain enthusiastic about purchasing a luxury or exotic automobile, preferences are changing across the customer journey:

For most respondents, shopping was a near-constant activity. About 80 percent of buyers browsed the internet at least weekly, even when they didn’t have an immediate intention to buy. Once they had decided, however, around 70 percent of respondents completed their purchase within a month.
While a large proportion of buyers across all age groups favored a couple of anchor brands (notably Porsche and Ferrari), millennials and Gen Z respondents were more willing to cross-shop and consider other brand options.
Across all age groups, one-third of buyers cited emotion-based factors as the primary reason for purchasing a vehicle. However, younger buyers were more likely to view a luxury automobile as an investment opportunity or as a reward, while older buyers were attracted by technological innovation and owning the latest model.
Although purchasing through an authorized dealer was the most popular option across all age groups, millennials and Gen Z were more likely to buy from digital platforms or through private sales. Significantly, the survey found a high degree of digital comfort among all generations, with three-quarters of respondents open to buying their next vehicle entirely online.
The vast majority of buyers considered experiences to be a valuable part of their brand satisfaction. While driving-related or vehicle-related programs such as track events and factory tours came out on top, lifestyle-based events such as wine tastings or fashion shows were also popular, suggesting an emerging opportunity to develop the luxury automobile experience beyond the vehicle.

The report’s findings indicate that ecosystem players can’t rely on traditional approaches to captivate and capture an evolving customer base.

To keep pace with the changes underway in the luxury and exotic automobile market, they should prioritize the following actions over the next few years: deliver regular, engaging online content that matches buyers’ growing digital sophistication; build emotional loyalty around brands; evolve e-retail models; and double down on experiences.

Click here to read the full report.

Sources:

Boston Consulting Group, duPont Registry Group