Car Sales Up As Luxury Consumer Spending Increases
As the global economy shows signs of recovery luxury consumer spending has been increasing too. Consumers who were once more focused on protecting their future and investing in safe-haven assets are now looking to enjoy a little more in terms of discretionary spending.
We’ve listed the top 3 areas where spending on higher end items has increased the most.
Things like high-end cars are a popular choice – providing both a status symbol and a practical tool. BMW has seen a lot of growth recently. Last year, 18.7 percent of their sales were to consumers in the United States, and they sold more than 1.81 million cars in total. Mercedes-Benz performed similarly well, selling 1.65 million cars.
BMW sales have grown by around almost 10% percent last year alone, and Mercedes have seen their sales increase by 13 percent. Other higher-end car makers such as Audi have seen similarly strong performances. In fact, Audi is becoming a strong competitor in the market, and their spending on product development and marketing is eroding the profits of the other luxury car makers.
Less traditional options such as the Tesla are developing a certain appeal as well, as consumers want something that is not just luxurious, but also ‘ahead of the curve’.
A certain indicator that consumer confidence in spending is on the up is the amount of people choosing to vacation abroad again. And particularly at the higher end of the market where people once again are seeking ‘experiences’ and going on long vacations to more luxurious destinations. Trips to Dubai, Paris, or Japan are becoming popular and replacing ‘stay cations’ or National Park visits; things that were common even among well-off families during the double dip recession.
Home Renovation Projects
Home improvements are back on the cards as well, as homeowners look to add extensions or conservatories, attic and garage conversions, remodel their kitchen, undertake a complete garden redesign, or fit a new bathroom. These non-essential home improvement niches were hit hard when the economy took a downturn in 2007.
And it makes sense that we would seek first to improve our homes. A luxury car will bring you a lot of joy, but if you buy it now it will depreciate as soon as it leaves the lot. Home renovations are a good option because they increase the value of your home, so you will recoup most of the investment should you ever come to move, and you get a chance to enjoy it every day while you are still in the home.