An exclusive new study led by Boston Advisory Group of duPont REGISTRY group projects that the U.S. luxury and exotic auto sector will grow from approximately $110 billion today to as much as $215 billion by 2035, underscoring the category’s increasing influence within an increasingly interconnected luxury lifestyle ecosystem.
According to the report, the overall U.S. market for vehicles priced at $100,000 or more is expected to grow at a compound annual growth rate of 5% to 7% through 2035, reaching a market value between $180 billion and $215 billion. Sales of used cars are expected to grow up to 1.5 times faster than new ones, thanks to high new car prices and an increasing supply of inventory on the secondary market.
While buyers remain enthusiastic about luxury and exotic cars, preferences are changing throughout the customer journey, the report said. Players, including brands, dealers and marketplaces, will need to adapt to these changing preferences to secure their market position and leverage future growth.
By interviewing leading stakeholders and surveying more than 400 current and former collectors and potential buyers, the report’s authors found that while buyers remain enthusiastic about purchasing a luxury or exotic car, preferences change throughout the customer journey:
· For most respondents, shopping was an almost constant activity. About 80% of buyers surfed the Internet at least weekly, even if they had no immediate intention of purchasing anything. However, once they made a decision, about 70% of respondents completed the purchase within a month.
· While a large share of buyers across all age groups preferred a number of anchor brands (particularly Porsche and Ferrari), Millennials and Gen Z respondents were more willing to cross-shop and consider other brand options.
· Across all age groups, a third of buyers cited emotion-based factors as the main reason for buying a car. However, younger buyers were more likely to view a luxury car as an investment opportunity or as a reward, while older buyers were attracted to technological innovation and owning the latest model.
· While purchasing through an authorized dealer was the most popular option among all age groups, millennials and Gen Z were more likely to purchase through digital platforms or through private sales. Significantly, the survey found that all generations experience a high level of digital comfort, with three-quarters of respondents open to buying their next car entirely online.
· The vast majority of buyers viewed experiences as a valuable part of their brand satisfaction. While driving or vehicle-related programs such as track events and factory tours topped the list, lifestyle-based events such as wine tastings or fashion shows were also popular, indicating a new opportunity to develop the luxury car experience beyond the vehicle.
The report’s findings indicate that ecosystem players cannot rely on traditional approaches to engage and capture an evolving customer base.
To keep pace with the changes underway in the luxury and exotic car market, they must prioritize the following actions in the coming years: delivering regular, engaging online content that matches buyers’ growing digital sophistication; build emotional loyalty around the brand; developing e-retail models; double the experiences.
About duPont REGISTRY Group
The heart of the Driven lifestyle division, the duPont REGISTRY group is the world’s leading luxury ecosystem, encompassing the culture, community and commerce of the luxury car lifestyle. Built by some of the biggest names in luxury automotive, DuPont REGISTRY Group represents a vibrant community of members around the world that has been nurtured for four decades. His portfolio includes duPont Registry, Canossa events, Horse, Supercar Owners Circle, Petroleum, Retromobile USA, FerrariChat And Sotheby’s Motorsport.
About Boston Consulting Group
Boston Advisory Group works with leaders in business and society to tackle their key challenges and seize their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders – enabling organizations to grow, build sustainable competitive advantage and drive positive societal impact.
Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that challenge the status quo and drive change. BCG delivers solutions through leading management consulting, technology and design, and business and digital ventures. We work within the company and at all levels of the client organization under a unique partnership model, fueled by the purpose of helping our clients thrive and empowering them to make the world a better place.
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