Market insight: Luxury brands hold firm through falls

AUSTRALIA’S luxury car sector has shown remarkable resilience over the past six years despite the ravages of a pandemic, an erratic confidence rating in the economy, a tightening of financial services and some restrictions on vehicle availability.

The sales of the overall passenger car and SUV category in 2020 was 676,804 units, down 27 per cent or a whopping 247,350 units on the 2015 calendar year.

Yet sales of the six volume brands dealing exclusively in rarefied air with vehicles priced at more than $250,000 recorded an average sale increase in the same period of 11 per cent.

The turnaround is, not unexpectedly, attributed to the consistent, though small, wealth tier in Australia fed by strength in industries including resources, IT and banking.

The buoyancy also spilled over to high-end models within other brands including Porsche, that in 2020 was up four per cent on its 2015 sales.

The six pure luxury brands – Aston Martin, Bentley, Ferrari, Lamborghini, McLaren and Rolls-Royce – mostly strengthened in the six years with McLaren almost doubling sales in the period, from 36 units in 2015 to 63 in 2020.

Its success was primed mainly by the explosion of new models and the availability of wealth in the economy. It is reflected even stronger in the first quarter of this year compared with the first three months of 2020, with McLaren sales up 15 per cent to 21 for the quarter.

It sold 63 cars in 2020, stymied like other car-makers by the coronavirus and the resulting limited availability of stock in the past year, but still up on 2015.

Rolls-Royce has been one of the success stories as it enhanced its model range over the six-year period with the addition of the Black Badge range and an expanded bespoke service.

Its Dawn convertible, based on the Ghost saloon, was launched in 2015 and immediately boosted the brand’s sales by 15 units in that first year. The brand has five models – Phantom, Ghost, Dawn, Wraith and Cullinan – with sales in 2020 of 42 units, up from the 30 sold in 2015.

It has sold four examples of its SUV model, the Cullinan, in the first three months of this year. The model – priced from $659,000 to $754,000 – found 18 buyers in 2020.

Rolls-Royce’s 2020 result was also affected by the pandemic. In the previous year it had sold 55 units. In the first quarter of this year it has sold 12 units, the same as the corresponding quarter in 2020.

Bentley sales are up in the six years, finding 165 buyers in 2020 compared with 158 in 2015. But it’s had better years, with 2017 showing 219 sales and 208 the following year.

But strength is seen in the first quarter sales of 2021 with 52 buyers, up from the 48 in the same period last year.

Lamborghini has also stepped up from the 84 cars it sold in 2015, with 111 leaving showrooms in a restricted 2020 market and first-quarter sales this year at 38 units, up from 31 in 2020.

In 2020, Ferrari was up 18.5 per cent on its 167 sales of 2015 but the order book has been curtailed on supply, evident by the first-quarter sales of 42 this year and 71 in 2020. It sold 13 cars in March this year, the same as the month last year.

Aston Martin has had the least successful run of the six brands, selling 92 units in 2020, down 30 per cent on 2015 when it found 130 buyers, but the first quarter of this year shows a strong rebound with 43 sales. This compares with 27 in the same period last year.

Other luxury brands show six-year sales either up or level with the 2015 figures. This includes Porsche and Maserati that both are selling better in the March quarter than the same time in 2020, with Porsche at 1367 sales for the quarter, up 16 per cent.

Mercedes-Benz, BMW and Audi now have the bulk of their sales in the sub $60,000 segment – and which are predominantly SUVs – but while their top-end models are relatively low on volume, they are consistently in demand with excellent growth.

As an example, sales of BMW’s 8 Series Gran Coupe is up 735.7 per cent while the other 8 Series versions are up 40 per cent.

Mercedes-Benz’s largest SUV, the GLS, is up 119.1 per cent in 2020 compared with 2019 and BMW’s upper-level SUVs, the X6 and X7, are up 253.2 per cent and 42.4 per cent respectively.

Audi’s seven-seat SUV, the Q7, is doing better than the previous year by 28 per cent and its exotic R8 sports coupe and spyder is up 41.7 per cent.