What was once a mind-boggling amount sum to spend on an auto has become just another price point
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The search is on for a new superlative. The growing stable of autos with base prices above $100,000 comprises cars so fast, lavishly equipped, and expensive that luxury simply doesn't cover it anymore. Enter the supers, ultras, ?bers, exotics, high-high-ends, and limited editions-by design.
It doesn't hurt that, according to a recent survey by Capgemini, the number of millionaires and billionaires grew last year to a record 8.3 million people worldwide, up an astounding 10%. That growth in high-net-worth individuals capable of dropping six figures on a car has been music to high-end manufacturers' ears.
A BEVY OF BEAUTIES.
Increased demand has been met by manufacturers large and small at varying price points. BMW revived the royal Rolls-Royce badge with the regal Phantom, which carries a sticker price above $300,000. Not to be outdone, DaimlerChrysler's (DCX) Mercedes-Benz resurrected the stately Maybach at a similar price.
Meanwhile, Volkswagen, known for its everyman Beetles and Rabbits, let a flock of Bentleys out of its stable. Models include the strong-selling Flying Spur and Continental GT, both priced around $164,990. (The Arnage sedan starts at $212,990.) And, according to Automotive News, the upcoming Azure convertible is already sold out in the U.S.
Even as prestigious legacy brands have been revived for high-end markets, many mainstream luxury manufacturers offer vehicles with base prices that exceed six figures. (Many other models could surpass $100,000 with a package of pricey options, but we didn't consider those.) Mercedes-Benz offers four models, including the S600, SL600, CL600, and SLR McLaren, with base prices ranging from $130,275 to $452,750. Porsche, meanwhile, offers two models, including a version of its new Cayenne SUV, that retail between $111,600 and $122,900. Audi and BMW both offer large luxury sedans, the 760Li and A8 W12 Quattro respectively, that have base prices just under $120,000.
Manufacturers have found that tuned specialty editions also command high prices. Mercedes-Benz's AMG division, which produces superfast, "F1-inspired" versions, offers six models with base prices above $100,000. BMW offers a similar M badge, though none of the vehicles it offers surpass a base price of $100,000.
Smaller, more exclusive brands have also expanded offerings. Maserati (see BusinessWeek.com, 7/14/05, "Maserati's Beauty on a Budget") and Ford's (F) Aston Martin offer models with MSRPs north of $100K. And, of course, classic supercar companies Ferrari and Lamborghini passed the $200,000 mark long ago.
THE BW REVIEW.
BusinessWeek.com took a look at the cars currently on the market that have base prices above $100,000. The list includes nearly all the vehicles from mass-market luxury nameplates as well as a sampling from smaller brands and manufacturers. The list doesn't include exotics from such low-volume makers as Koenigsegg (see BusinsessWeek.com, 3/24/06, "A Revolution in Swede Speed"), Bugatti (see BusinessWeek.com, 6/6/06, "Bugatti's New Level of Vroom"), or Saleen. Vehicles from the AMG division of Mercedes-Benz are seen in the same slide.
To be sure, volumes at these price points are low, even for well-known brands such as Rolls-Royce, Mercedes, and Porsche. Since the beginning of this year, for instance, Automotive News estimates Rolls-Royce has sold 168 models, Maybach 60, and Aston Martin 220. Higher volumes are estimated for Maserati, which has sold 1,090 cars (an increase of about 15% from the same time last year), and Bentley, which has sold 1,990 models (up about 14%). But even brands such as Cadillac, with its $100,000 XLR-V roadster (see BusinessWeek.com, 6/28/06, "$100,000 Cadillac") are now getting into the game.
The battle for the hearts and minds of consumers with the means to buy $100,000 cars continues though. The Manhattan-based Luxury Institute surveys high-net-worth individuals with annual incomes above $200,000 and a net worth of at least $5 million to determine how ultraluxury brands rate with those consumers.
MY EVERYDAY ROLLS.
According to Milton Pedraza, the Luxury Institute's CEO, in the 2006 survey Rolls-Royce surpassed Maybach as the top-rated ultraluxury brand. Rolls scored well in quality, uniqueness, and exclusivity. Rolls was also the most recommended brand, followed by Bentley.
Pedraza's research shows wealthy individuals moving to high-end vehicles above $100,000, in particular sedans. "People are going to these cars as their mainstays," he says. "For these consumers, cars like the Maserati Quattroporte, these are everyday cars."
The biggest risk for manufacturers? Muddling brand image by confusing product lines??edraza points to similarities between the Maybach and Mercedes-Benz S Class??nd moving too far down-market. "To some extent, BMW and Mercedes-Benz have diluted their image by going down-market. Maserati, meanwhile, is proving there's a healthy market up to $175,000."
Click here to see a slide show of $100,000-plus cars.