With talk of recession on seemingly everyone’s lips, the threat of negative interest rates being bandied about by President Trump and the bond yield curve well and truly inverted – if you don’t know what that means, I suggest you to find out how deep in the doo-doo we really are – we can at least find some comfort in the fact the rich are becoming, well, spectacularly richer.
Call it unfair. Call it unjust. Call it #CarInequality, if you’re looking to start a hashtag. No matter what you label it, however, it doesn’t change the fact that, while you and I are buying fewer and less expensive cars – overall Canadian sales were down 1.9 per cent last year, the first time sales have declined since 2009 – the rich continue to challenge luxury automakers to create ever more hedonistic rides.
To wit: Ferrari sales were up a not-at-all-insignificant 10.2 per cent in 2018. That’s 9,251 Prancing Horses, precariously close to the 10,000 units Maranello once considered making an artificial cap so as to retain its exclusivity. Revenues, meanwhile, were up to 3.42 billion-with-a-b Euros. Do the math and that works out to, at current currency exchange rates, $540,480 for every 488, California and 812 Superfast sold.
Now, to be fair, that includes merchandising – basically the Prancing Horse-branded trinkets that are the only Ferrari-badged thing we proles can afford to buy – but if you’re getting the idea that Maranello spins off profits like Timmie’s does doughnuts, you’re getting the picture.
Even newcomers to the exotic segment are having banner years. Upstart McLaren, for instance, is already up 5.4 per cent for the first half of the year – and yes, that’s despite the war drums of recession beating ever stronger lo these last few months – with 2,640 units sold so far in 2019. And, as the rest of the industry is finding out, although the mid-priced – that’s me being cynical, calling a $300,000 supercar “mid-priced” – Sport and Super series cars are selling very well, it is the company’s “Ultimate” Series that’s in highest demand.
Neither the Senna nor the Senna GTR will give back much change from US$1 million, and the Speedtail hybrid is reputed to cost US$2.5 million. Yet McLaren’s entire production of Ultimates are all spoken for until at least the end of the year. The investment tip to be gleaned? The über-rich – the 0.1-per-cent of high-income earners that so incur the wrath of “democratic socialist” Bernie Sanders – will soon be running out of garage space; buy car condo space.
And, it’s not just wealthy boy-racers that are spending like it’s Two-buck Tuesday at Dollarama. Not to be kept down, old money is dipping into its trust funds in its quest for ever more sybaritic metal. Rolls-Royce, those hoary old purveyors of faux starlight roofliners made of 12,000 individually placed LED lights, grew 22.2 per cent last year.
In fact, its 2018 sales of 4,107 Phantoms, Ghosts and, of course, the new Cullinan mark the first time Goodwood has ever moved more than 4,000 units. When Rolls-Royce is back-ordered in “all-terrain” vehicles – don’t you dare call it a sport utility – that start at $370,500, you know a paradigm has shifted that completely passed you and I by.
Other brands’ even more niched (that’s how rich people say “expensive”) supercars are thriving as well. Pagani sold four more Huayras in 2018 than they did 2017. That may not sound like much, but when you only sell 40 cars a year, that’s a 10-per-cent increase, and another record year. Remember this is a company that doesn’t sell a car for below a million bucks, and Modena’s boutique supercar maker recently sold three Zonda HP Barchettas for US$17.5 million apiece, making them the most expensive new cars ever to fly off a showroom floor.
The list goes on. Bugatti? Up almost 50 per cent. Only Bentley is seemingly letting down the side, and that’s only because its cars are so old – as in dated, not historic – the Bentayga (yet another SUV that was never supposed to see the light of day) making its 2018 10-per-cent dip in sales at least manageable.
But the Mac Daddy of luxury segment sales growth is Lamborghini, the Italian-cum-German (it is owned by Audi) company increasing sales in 2018 by a whopping 51 per cent. Yup, Lamborghini, once the problem child of Italian exotics, moved 5,750 cars last year, the U.S.A. being its primary market. Sales grew across the board, all regions reporting banner sales, and all models – both V10- and V12-powered supercars – having record years.
The real difference was, of course, the new Urus. Lamborghini’s second SUV – you do remember the LM002, the Rambo Lambo, right? – found 1,761 customers, most of them new to the brand. According to Stefano Domenicali, chairman and CEO of Automobili Lamborghini, “in 2018, Lamborghini entered new dimensions,” allowing the Sant’Agata Bolgonese-based company to “quadruple our sales numbers since 2010 [when it sold 1,302 units].” Jesus, what’s going happen if – when? – Ferrari builds its super-SUV?
So never mind income inequality – Bill Gates, Warren Buffett and Jeff Bezos are now worth more than the bottom half of all Americans – car inequality is most definitely upon us. If I am reading this right, while the rest of us are trying to stretch out our car loans to 80 months to make the payment palatable, the super-rich are trying to find someone to gold-plate their spark plugs. God help us all when this bubble bursts.