Part of BIV’s What big money buys series: Wealthy Vancouverites are lavishing untold amounts of money on big-ticket indulgences, driving a bonanza for the region’s dealers in luxury furnishings, vehicles, yachts and other top-tier toys.
The decor inside the glitzy sales space of Rolls-Royce’s new showroom in Vancouver’s Kitsilano district reflects the new era of luxury car buyers.
During the showroom’s May 17 opening, it featured a mirrored, four-panel room with golden candles and soft lighting for selfies.
The New Age nuances point to the sensibilities of what Christian Chia, president and CEO of OpenRoad Auto Group Ltd., calls “the Instagram-worthy” buyer.
The new generation of ultra-wealthy car buyers values image over investment; that might be good for sales but not so good for brand loyalty.
It is also far removed from the older generation of wealthy buyers, who prized their purchases and kept them for years.
“They keep their cars a very short time, often less than a year,” said Chia. “They are also very brand agnostic, so they don’t care about the brand; it is whatever is hottest. Right now, Lamborghini seems to be the brand they gravitate toward and to a lesser extent McLaren.”
Dealerships are therefore happy to go the extra mile to ensure these buyers are happy because, as Chia said, to them, the sky is the limit.
“They are kind of a marketer’s dream because they spend a lot and they are not price sensitive.”
The Rolls-Royce event also celebrated the launch of the Cullinan. The company’s first SUV model, priced at around US$325,000, is also a significant departure from its traditional coupe-style car production.
Rolls-Royce Motor Cars (LON:RR) CEO Torsten Müller-Ötvös said SUVs are now a big part of the U.S. and Canadian markets.
“[The Cullinan] is a major departure for Rolls-Royce as a brand … but it is very much driven by a changing consumer group.”
The Cullinan, he added, is aimed in part at tapping the significant buying power of the North American West Coast.
The world of opulent autos is populated by a wide range of brands that fall into three main categories differentiated by horsepower, speed and price.
Hypercar brands include Pagani, Bugatti and Koenigsegg.
Their maintenance and servicing costs are significant. For example, spare tires for the Bugatti Vision GT can cost more than the average vehicle – about $90,000 – and an oil change can cost up to $20,000, according to Motor1.com.
Supercars include brands like McLaren, Ferrari, Lamborghini and the Porsche GT4.
Rolls-Royce, Mercedes-Benz and BMW are the main players in the luxury category.
A list of cost and horsepower of some of the world’s most popular supercars provides insight into basic financial outlay for prospective buyers:
•Bugatti Chiron: US$2.5 million; 1,500 horsepower (HP)
•Pagani Huayra: US$2.5 million; 745 HP
•Koenigsegg Agera RS: US$1.9 million; 1,160 HP
•McLaren P1: US$1.5 million; 904 HP
•Ferrari Laferrari: US$1.4 million; 949 HP
•Lamborghini Aventador: US$450,000; 740 HP
The local market for used luxury cars is also extremely robust, according to Craig Stowe, founder of the Luxury and Supercar Weekend.
He said limited ownership periods, low mileage and high manufacturing quality help ensure that the value of most luxury cars appreciates rather than depreciates.
Yet Vancouver’s title as Canada’s luxury car capital could be threatened by B.C.’s new luxury car tax, which came into effect on April 1.
For cars priced at between $125,000 and $149,999.99, buyers must pay the 7% PST plus an 8% luxury tax. For cars $150,000 and over, the luxury tax is 13%. However, given the new laws, the GST is also charged on top of the PST, making the total tax roughly 26% on transactions over $150,000.
“Luxury car sales have come to a grinding halt in B.C.,” said Stowe. “We are the supercar capital of North America, but if the last few months is telling of anything, it’s that the NDP have slowed that quickly.” •
