I’ve been asked this question by one of the most expensive car producers in England as part of a uni assignment, and i was wondering if I could get some input (as my course is not related to Economics).
The Question: Who would be able to afford one of our cars (~£150k) in 2015.
I guess the state of the economy in that year must be considered, as well as the wealth of different countries and the kind of people who will be able to afford it.
What is your take on this? Would anyone be willing to share their opinions?
since the cars price will rise roughly probably in line with inflation, I would say roughly the same amount of people
The factors I think they want me to consider relate to the change in economy. For example will China be a dominant super power by 2015? Will this make them more likely to buy the cars?
Who in other continues will be doing finantially well enough in 2015 to afford a car at this price?
We don't know what the economy will be like next year, let alone in six. Why not build a car that will appeal to lots of different people? Say it's specially adapted to the uncertainties of modern life.
It is meant to just be a prediction though.
"Who will the new consumers of luxury be?"
Consider nationality, lifestyle, politics, demographics, views on social acceptability.
Be able to afford? People who have saved money over the years.
A plumber can save all his life and he wont have enough money.
if it stays at 150k, then quite a few!
if rises in line with inflation, probs as many as before credit crunch - economy should have recovered strongly by then
True, but a person with a decent income who is strict with his/her spending can easily raise 150k over the years.
The problem is that even if that person would be able to afford the car, spending several+ years' worth of savings on a car wouldn't be quite right.
Just pricing a car at 150k won't sell it, or having a big name either if it's old fashioned. Didn't Rolls Royce struggle the last decade?
China and India are growing fast, but not that fast. The high end Chinese and Indian incomes (excluding the super wealthy who number in the dozens) are around the American median. There might be a few more super rich by then, but I can't imagine the customer profile changing too significantly just yet, especially in light of the current economic downturn which is likely to cause stagnant or negative growth
Depends. The market within europe for High luxury vehicles will stay pretty much the same, and will not see significant growth. you will have the same people - city boys, crooks, lucky people, the odd grafter, and footballers, tv stars etc buying these vehicles. Export markets in Russia, the emirates and S.E asia are growing, and the lack of a presence of established luxury car brands makes the market likely. As 3rd/2nd world nations get richer, the rich get very rich. Evident in oligarchies like Russia. Oil will still be a big player in 6 years time, so oil rich states will be an obvious market, and generally anyone who can exploit an emerging market for something.
Personally I don't think the market will change much in this time, Its barely the life cycle of the average luxury car!