#United States #Boston #Boston Consulting Group #Luxury Cars #Exotic Vehicles

A Bright Future for the US Luxury and Exotic Car Market

The luxury and exotic car market in the United States is on track for phenomenal growth. As projected by the Boston Consulting Group (BCG) and duPont REGISTRY, this sector is expected to soar from approximately $110 billion today to between $180 billion and $215 billion by 2035. This growth represents a near doubling of its current value, underscoring a renewed interest in luxury automotive brands among consumers.

Market Dynamics

The anticipated growth is largely driven by a surge in demand for vehicles priced between $100,000 and $170,000—both new and pre-owned. Sales in this category are forecasted to rise between 6% and 8% annually. In contrast, the so-called ultra-luxury and hyper-luxury segments (vehicles priced at $170,000 and above) are expected to experience slower growth. This shift indicates a growing preference for accessible luxury amid rising production costs and tariffs that influence new car prices.

Concurrently, the secondary market is poised to outpace new car sales, with projections indicating a growth rate 1.5 times faster than that of new vehicle purchases over the next decade. The sale of used luxury and exotic cars is expected to grow at an annual rate of 5% to 8%, compared to 5% to 6% for new vehicles. This data illustrates a shift in buying habits as consumers look for more financially savvy options in the luxury market.

Consumer Behavior Insights

A key finding of the BCG report is that emotion plays a pivotal role in luxury car purchases. One-third of surveyed buyers cited emotional connections to brands or designs as their main reason for vehicle selection. Meanwhile, lifestyle aspirations also factor into purchasing decisions, with younger generations, particularly Millennials and Gen Z, broadening their brand exploration compared to older demographics.

Notably, digital platforms are increasingly shaping the buying journey. Approximately 80% of buyers engage in online browsing for luxury vehicles on a weekly or daily basis, reflecting a trend where three-quarters of respondents expressed interest in purchasing their next vehicle entirely online. This tech-driven approach marks a significant shift from traditional dealership models and highlights the necessity for brands to tailor their strategies to meet digital-savvy consumer expectations.

The Experience Factor

The luxury car segment is witnessing a transformation—where ownership and buying experiences become just as important as the products themselves. About 95% of respondents indicated that experiences greatly enhance brand satisfaction. Driving events, factory tours, and exclusive experiences are highly valued among buyers, with emphasis placed on personalized services such as vehicle pick-up and resolution of minor issues. However, interestingly, 60% admitted they had not purchased an all-in-one service package due to high costs or lack of offerings.

As Antoine Tessier, CEO of duPont REGISTRY, noted, “Luxury is no longer defined solely by the vehicle itself”; today's consumers demand a complete and curated buying journey that goes beyond just the car itself. This signifies a trend where immersive experiences and collaborations with suitable partners will shape the next wave of growth in this sector.

Future Outlook

As brands navigate this rapidly evolving landscape, they must consider enhancing the overall ownership experience, underscoring the move towards personalization and seamlessness. Felix Stellmaszek, leader of BCG's Automotive and Mobility practice, emphasized that heritage alone won't suffice to attract modern consumers. Brands that can master the art of blending cutting-edge engineering with immersive ownership journeys will see the most success in the coming years.

In summary, as the US luxury and exotic car market transitions toward a higher valuation, companies will need to not only innovate their offerings but also forge deeper connections and experiences with their consumer base to drive long-term loyalty and growth. With changing consumer preferences, embracing technology and prioritizing curated experiences will be crucial for brands aiming to thrive in this new age of luxury automotive culture.