During tough economic times, luxury car sales are largely unaffected.
Some customers have been waiting more than 12 months for a Lamborghini SUV while Ferrari had to cut off orders of its ultra-luxury Purosangue model to keep the waiting list from getting longer than two years amid very high demand.
Another name inextricably linked to auto luxury is Rolls-Royce (RYCEF) , which hit a milestone that the company has not seen in its 119-year history. The company set its own sales record with 6,021 cars sold in 2022, an 8% increase over 2021.
It was also the first time Rolls-Royce passed the 6,000 mark for the number of cars sold in a given year.
No Slowdown or Downturn, Says CEO
American sales in particular have been very strong throughout the last year. The luxury automaker based in Goodwood, England, saw 35% of its sales in 2022 come from the U.S., while China followed as the next largest market with 25% of all sales.
Another fifth of sales came from different European countries.
“We haven’t seen seen any slowdown or downturn,” chief executive Torsten Muller-Otvos told CNBC. “We haven’t seen any negative impact.”
Another record was the average price that buyers paid for a Rolls-Royce, although the $534,000 number reflects not just high sales but also the launch of the more costly Bespoke program. While allowing customers the chance to customize the smallest detail of their car, it also comes with the accompanying steeper price tags.
“Sales are not our sole measure of success: we are not and never will be a volume manufacturer,” Muller-Otvos wrote in a LinkedIn post announcing the numbers. “Bespoke IS Rolls-Royce, and commissions were also at record levels last year, with our clients’ requests becoming ever more imaginative and technically demanding.”
This Is Why People Are Buying So Many Luxury Cars
Rolls-Royce expanded its hiring and now has over 2,000 people working for it across different countries, Muller-Otvos said in his post. Approximately 150 of those jobs were created in the last year.
The company’s first fully-electric coupé, called the Rolls-Royce Spectre, is also set to come out at the end of 2023 or early 2024. As Rolls-Royce enters the electric car market, it is also attracting buyers who are interested in seeing how the automaker known for classic luxury will fare in the electric market.
There is already a waiting list for the four-seat Spectre that is expected to start somewhere at $400,000. Muller-Otvos also said that it would continue its “respectful but forward thinking reinvention of the Rolls-Royce brand” but retain its “unwavering focus on profit.”
This all comes at a time when average-earning people are in a difficult spot. Inflation reached 7.1% in November 2022 while talks of a looming recession are reaching a fever pitch. But luxury sales have remained strong not just in cars but everything from rare wines to luxury handbags.
Sales of personal luxury goods are expected to be 22% higher across the globe when numbers for 2022 are calculated in large part because of pandemic-related recovery and a larger number of high earners who are not particularly affected at the level of individual purchases.
“I’m not saying we’re immune from recessionary tendencies,” Muller-Otvos told CNBC of the state of the economy. “We have seen years when our business was affected. So let’s cross our fingers that isn’t happening this year.”