The U.S. auto market is gradually shifting towards more expensive cars. Supply chain shortages and global shipping snafus have given automakers convenient excuses to focus on cars with better profit margins, and their plan is working. Luxury vehicles are going through a boom period in the U.S. that doesn’t look like it’s going to go bust any time soon.
Upscale brands like Audi, BMW, Mercedes-Benz and even Tesla (apparently now a luxury brand) are selling more cars in the U.S. than ever before, as the Wall Street Journal reports. Sales of luxury cars are at record highs, accounting for 17.3 percent of all U.S. auto sales in 2022.
Last year, luxury auto sales made up 14.1 percent of overall sales, but as the U.S. — and rest of the world — begins to recover from the the global pandemic, the market for luxury cars is not only recovering, but is breaking records. And it’s not just luxury and premium models flying off lots: supercars and exotics are now breaking sales records in the U.S., too.
Cars from Bentley, Ferrari and Lamborghini, which WSJ calls superpremium models, increased to 6,700 models sold in the first half of 2022. That’s a 35.6 percent sales bump compared to the same period in 2017. Even though that market contrast is a bit dated, going back five years, it still points to growth in a relatively obstinate segment.
Selling econoboxes is different than selling supercars, is all. Just trade the instant coffee and cookies that dealers use to woo us mere mortals for, what, Caviar and Kopi luwak? I don’t know. I’m not rich. But more and more American car buyers sure are, and it’s this bigger pool of affluent Americans that’s behind the boom of luxury cars sales.
Last year, 2.48 million luxury cars were sold in the U.S., which represents a 13.2 percent jump over the year prior. Meanwhile, mass-market auto sales grew by only 1.7 percent in 2021. Market analysts at J.D. Power claim that luxury cars would have sold in bigger numbers last year, if it weren’t for supply constraints.
This is, presumably, part of the reason why automakers are inching towards higher brackets even with pedestrian models. The WSJ says the difference between a Kia Telluride and Lexus RX 350 was $6,875 in 2022 compared to $9,000 a few years ago, before the global pandemic.
The pandemic has driven the wedge deeper between well-heeled buyers and those who are less well-off. Spending $80-, $90- or $100,000 on a car is now becoming more common, according to our own Tom McParland. But whether they’re new cars, used cars, luxury cars or supercars, what they all have in common is they cost more; superpremium cars are just immune to price hikes.