Prestige-car sales show resilience
Luxury consumerism drives brands such as Porsche, Rolls-Royce and Bentley to buck the slow-sales trend
Sales of new luxury and sports cars in SA largely held firm in 2018 despite a slowdown in overall vehicle sales, and some industry observers believe the prestige-car market looks set to grow in the face of consumer belt-tightening in other segments.
Some are more positive than others. Driving a growth sentiment is an enormousshift in luxury consumerism, says Marc de St Pern, operations manager for European Automotive Imports — SA, SA’s Maserati importer.
“A report published by Market Research Future looking at global luxury vehicle market analysis for 2018-23 estimates that the luxury vehicle market will grow at an annual rate of 35% over the next four years,” says Pern.
“While luxury cars are considered status symbols, many customers are now buying these vehicles to express individuality,” he says.
Spending power in the prestige-car market showed a lot of resilience in 2018 in the face of a hike in the maximum ad valorem tax from 25% to 30%, a luxury tax that works on a sliding scale and has a significant impact on higher-priced vehicles.
The ad valorem increase was part of a triple whammy to hit local consumers in 2018 along with a 1% VAT increase to 15%, and a weakening rand.
Brands such as Bentley, Ferrari, Rolls-Royce and Porsche nevertheless all fared better in 2018 than the year before. Others, such as Maserati, McLaren and Aston Martin, showed less resilience.
Porsche remained the volume player in the sports car market, selling 1,334 cars in 2018, a 3.3% rise over the 1,292 units it moved in 2017. Sales were boosted by the introduction of the new-generation Cayenne, but Porsche expects a flat market for 2019 despite the introduction of the new-generation 911 in May.
“The new Macan is sure to perform well in the luxury compact SUV segment and is available for sale now,” says Christo Kruger, spokesperson for Porsche importer, LSM Distributors.
“The Panamera GTS is an eagerly anticipated addition to the current Panamera range, offering more emotion and power. Other highlights will be the introduction of the new Cayman GT4 and Boxster Spyder.”
LSM Distributors also expects a strong year for Lamborghini, the Italian sports car brand for which it took over the importation rights from Imperial Group in 2018.
“We are expecting a sales increase in 2019 with the Lamborghini Urus as well as the recently revealed Huracan Evo. The latter is anticipated for local market introduction around August this year,” says Kruger.
The third brand in the LSM Distributors stable, Bentley, is flying high and sold 82 units in 2018 — 20% growth over 2017 that was aided by the introduction of the new Bentayga SUV.
Bentley expects a flat market for 2019, saying that currency fluctuations and economic conditions are always challenging, but will launch its new Continental GT Convertible and Mulsanne WO Edition to mark the brand’s centenary year. A new Bentley dealership has just opened at the V&A Waterfront to serve Cape Town clientele.
Daytona, local importer of Rolls-Royce, McLaren and Aston Martin, didn’t provide sales figures but reported that 2018 was a tougher year for retail and required far more intervention from the sales and marketing teams to try to achieve sales targets.
“In some instances; like with Rolls-Royce for instance, targets were over-achieved while with other brands it was far harder to try to exceed target,” says Grant Dryden, GM of Daytona.
He reports that he’s already seen an increase in sales and inquiries in 2019.
“It is clear that market confidence has returned and people are ready to purchase again. We definitely expect a better 2019 than 2018 and we firmly believe that we will meet all targets and in some cases exceed them.”
Daytona has backed up this confidence by building a new 8,000m2 showroom in Melrose Arch, Johannesburg, to sell and service its three brands along with Pagani, the ultra-exclusive Italian supercar marque that was recently added to the portfolio.
“Here we are able to stock far more preowned high-end luxury vehicles which we believe will put us firmly on the map as the leading supercar preowned dealer,” says Dryden.
Maserati’s sales took a 47.6% knock in 2018 with 86 units sold, but the Italian brand is forecasting a more promising year ahead, saying it is in a position to offer more value to Maserati customers in 2019.
Ferrari held steady and sold 29 cars in SA in 2018, two more than the year before, but the prancing horse anticipates 2019 to be more challenging than previous years due to various market conditions including import duties and the ad valorem tax.
Mercedes-Benz says the local trend has been a decline in the luxury segment in the last two years as household budgets are under significant pressure due to current economic conditions. However, sales of the brand’s flagship sedan, the S-Class (including the Mercedes-Maybach), bucked this trend to grow 18% in 2018.
Rival brand BMW won’t give sales figures but also reported an increasing uptake of its range-topping 7 Series, the M760Li xDrive, in 2018. The Bavarian carmaker expects to grow its presence in the luxury class in 2019 with new models such as the facelifted 7 Series, the X7 large SUV, and the 8 Series, which will be available in coupé, convertible and gran coupé forms.
Leading vehicle financier WesBank expects the overall new-vehicle market to decline 1.0% in 2019, citing “little in the way of economic stimulation on the horizon and a slump in the global economy”.
WesBank said as average new-vehicle pricing remains at around 2.5%, well below the inflation rate, it will assist in improved new-vehicle affordability for consumers.
However the expected introduction of the Carbon Tax Bill later in 2019 could see price hikes on cars, especially larger-engined ones that use more fuel.