The global luxury car market is being reshaped by five new emerging trends, claims McKinsey and Co, a research firm.
It claims divergence across China, Europe, and the US is a key industry-changing trend, while the others include disruptive movement led by premium customers’ preferences, connectivity and design, evolving brands, regulations.
China to be on par with the US by 2023In the coming decade, Chinese, European (especially German) and US OEMs will continue to dominate the luxury car market, but there will be a significant shift, claims the research.
US remains the volume leader in the segment with around 1.4 million units delivered, China’s luxury car market sales number would grow to a similar level by 2023, the study claims. Chinese startups’ focus on electric vehicles and self-driving vehicle technology will play a key role in this shift, claims the research.
Different market, different preference
Luxury auto manufacturers generally develop cars meant for global markets. However, varied customer preferences in different markets like the US, China and Europe are redefining luxury cars.
For example, while buying a luxury car, the US customers look for driving performance as the first preference, followed by the overall experience of ownership, interior design and functionality, powertrain. Exterior design gets lesser preference from them.
European buyers, on the other hand, give most priority to powertrain, followed by interior design and functionality, driving performance, exterior design and overall experience of ownership. In China, the world’s single biggest luxury car market, the powertrain is the first priority for the buyers, followed by driving performance, brand, connectivity and overall experience of ownership.
Around 73 per cent of luxury car buyers start their buying journey online, compared to 62 per cent of mass-market customers. This has been driving the luxury automakers to focus more on their digital activities.
Lap timing records are passe
While luxury cars and sports cars used to be judged by the lap time recorded for a long time, now, there are new benchmarks – connectivity and design, as these are playing a critical role for the buyers to select the luxury car, reveals the study. In every 3 luxury car buyers, 2 have opined that they will buy a model with better connectivity features.
It further says that connectivity is becoming so important buyers that they are willing to switch the brands to get the desired level and features of connectivity, especially in China. In the coming decade, superior connectivity will become a decisive factor for the luxury car market across the world.
This is why the luxury automakers are focusing more on providing different connectivity features in their vehicles to offer a unique product compared to the rivals. The trend can be seen in the mass market segment as well.
Also, the EV technology has made the performance a commodity, as the research claims. The electrified or fully electric vehicles on an average take around 4.3 seconds to reach 100 kmph mark from zero compared with ICE-powered vehicles that take around 6 seconds on an average.
The design too is becoming equally important for the luxury cars to impress the buyers. Better the design, better the chance of it being sold. According to the study, 90 per cent of automotive experts and executives expect that interior features like display screens, space and usage of high-end materials will have more impact on the luxury car market than on the mass market.
Regulations disrupting the market
Different regulations like the emergence of stringent emission norms, fuel efficiency norms, EV policies are impacting the industry significantly.
For example, the European Union has established an emissions-cutting target of 37.5 per cent by 2030. Chinese government too aims 25 per cent of its total vehicle sales to be attributed to electric vehicles by 2025.
The governments across the world are implementing new policies and regulations for the automakers, which are driving the companies to go to the boardroom and think new strategies.
- Can We Please Stop With All The Hybrid Luxury Cars?
- This Is The Biggest And Least Noticed Trend In All Of Car Design
- The Hyundai Genesis Has Become An Insanely Great Used Luxury Car Value
- When Will The Globalization Of The American Car Market Be Complete?
- Ten Mistakes That Can Kill A Luxury Car Company
- The Insane Classic Car Market Is Slowing Down
- The Trump Tariffs Could Further Eviscerate The Convertible And Sports Car Market
- What's The Point Of Owning A 'Luxury' Car Anymore?
- Luxury Trucks Are Slaying Luxury Cars
- Who's fueling the luxury goods market? Men.
- The Ten Most Obnoxious Luxury Car Ads You'll Ever See
- 5 Things No One Tells You About Owning A Used Luxury Car
- Here Are The Four Things You'll Need To Own A Cheap Luxury Car
- What do Treatment Plants, Leather Furniture, and Luxury Cars Have in Common?
- Here Are Four Great Reasons Why Luxury Cars Aren't Only For Rich People
- Repeated theft shuts down luxury car sharing startup
- The Mercedes C300 Is The Luxury Car I'd Buy My Mom
- Is This The Moment Right Before The Car Market Collapses?
Five trends reshaping the global luxury car market have 901 words, post on auto.economictimes.indiatimes.com at January 15, 2020. This is cached page on Auto News. If you want remove this page, please contact us.