Buzz
Global car sales for 2022 are approximately 79 million units, marking a decade-low. However, the sales of cars priced above 100,000 euros have surged by around 6.5% annually during the same period. Last year, luxury car manufacturers outperformed the industry. While overall industry sales in 2022 were down by less than 1.3% compared to 2021, Rolls-Royce reported an 8% increase in units sold. Ferrari performed even better. From January to September 2022, the Italian automaker sold over 20% more cars compared to the same period in 2021.These two brands dominate a niche market but yield high profits. Rolls-Royce sold over 6,000 cars last year, a record for the company. In 2021, the British automaker accounted for over half of the cars priced above 250,000 euros worldwide. Ferrari holds over a third of the market share in this category. Meanwhile, Lamborghini takes the remaining share. Ferrari and Lamborghini are gradually gaining market share in the 150,000-250,000 euro segment, where Porsche currently leads. On the other hand, Bentley reported that in 2022, for the first time, they sold over 15,000 cars, marking a 4% increase compared to 2021.
The pricing of a basic Rolls-Royce vehicle doesn't contribute significantly to the company's profits. It's the bespoke details like custom paint, leather, and wood trims that elevate the average selling price of a Rolls-Royce to over half a million euros. Each car generates substantial profits, although the exact margin remains undisclosed, aligning with the company's policy of keeping customer information confidential. The profitability might even surpass that of Ferrari, a brand with a profit margin of around 25%.Ferrari boasts a market capitalization of approximately 43 billion USD, securing the 11th position among the world's most valuable car manufacturers. When considering the market value per unit sold, Ferrari outperforms the competition by a significant margin (see image). If Rolls-Royce were an independent company (currently under the ownership of BMW), it could potentially emulate Ferrari's success. Both Ferrari and Rolls-Royce possess extensive experience in the luxury market, allowing them to control the supply and maintain high prices for their products.
Market capitalization per unit sold. Without engaging in sales competition with other car manufacturers, each Ferrari sold commands an outstanding market capitalization.Both automakers are now compelled to shift towards electric vehicles, presenting distinct challenges for each. Contemporary electric cars match the speed of traditional models, diminishing the allure of Ferrari's high-speed reputation. Electric vehicles also operate quietly, a traditional strength of Rolls-Royce. The British automaker is set to introduce Spectre, its first electric car, by late 2023. Ferrari, renowned for the throaty exhaust notes of its cars, faces a more daunting task. Ferrari engineers are tirelessly working to unveil their first electric car around 2025, with a crucial emphasis on delivering the sensation of driving a racing car.According to The Economist.
