Market Intelligence: car brands follow luxury groups’ example
Our Market Intelligence fortnightly newsletter returned on May 2 with a slightly more upbeat tone than there has been in recent months.
The European automotive industry is the source of positive news because car manufacturers are “discreetly turning back towards leather”. These car manufacturers are increasingly withdrawing from the mass market, the report says, where they are losing more and more market share, especially in e-mobility, to competitors from China.
Instead, European manufacturers seem keen to concentrate on higher-priced cars. “In key export markets, leather interiors are still irreplaceable in the premium segment,” it says.
Brands are trying to maintain a position in the high-price segment, putting margin before volume. It is obvious that they are taking their cue from the large luxury groups with this strategy. “Returns on sales of 30%-40% are tempting, especially when there is obviously a sufficiently large clientele that is prepared to pay the appropriate premiums for brand and image,” Market Intelligence concludes.
