Economic crisis? What economic crisis?
The average new car price is $46,259, according to an August forecast from J.D. Power. Compare that to 2016, when the average new car price was $34,000, an amount that was considered scandalous at the time. For the average Joe, this is simply impossible to keep up with, but for luxury buyers, it doesn't seem to be making an impact at all. In fact, automakers like Mercedes are becoming more luxury-obsessed than ever, and who can blame them?
Lamborghini, Bentley, Rolls-Royce, and others at the top end of the market are selling more cars and making more money than ever. According to new research compiled by The Wall Street Journal, the pandemic has seen more wealth amassed, and now that those saved funds can be spent freely, more luxury vehicle sales are happening than ever before.
Sales of "superpremium" cars - those sold by the likes of Lamborghini and Ferrari at a vast premium compared to BMWs and Infinitis - are relatively small from a numbers perspective, but in percentages, they have increased phenomenally. In July, these so-called superpremium brands sold around 6,700 vehicles, representing a massive 35.6% jump compared with the same period five years ago.
Alain Favey, a board member at Bentley Motors, says that "wealth is growing, and so the luxury market is growing." He also notes that this expanding group of buyers is younger thanks to the lucrative nature of the tech and entertainment industries. In other words, don't feel bad for wanting to start an OnlyFans account - it could be the path to a new Lamborghini Huracan.
WSJ also reports that rising home prices and the stock market rally during the pandemic helped many Americans find new spending power. What's more, an analyst at J.D. Power named Tyson Jominy says that "the records could've been higher if they weren't supply-constrained."
However, these statistics and forecasts also show that those with less money have pulled back and are less likely to purchase a new car because, as we touched on at the outset, even non-luxury cars are becoming too expensive. What's worse is that, while exciting cars like the Toyota GR Corolla have relatively affordable base MSRPs, greedy dealers add markups that make it impossible for a lower-middle-class family to take advantage, even with years of savings.
Interestingly, those who do have the funds for a new car would rather wait longer and move into a more upmarket segment with their purchases because mainstream vehicles like the Kia Telluride and Ford F-150 Lightning are so expensive and difficult to find. By moving into a more expensive segment, the chances of getting a car when you want it improve thanks to slightly lower demand. Sadly, there are no signs of relief for the average American.
Legacy automakers like Cadillac are moving from "expensive" into Rolls-Royce territory, Ford trucks intended to be attainable are marked up beyond all reason, and Tellurides are snapped up the moment they hit the dealer lot, despite inflated prices. According to Mercedes-Benz USA CEO Dimitris Psillakis, "the market has not shown its full potential." These automakers will continue to become more and more expensive and luxurious, even if the majority of the population could care less.