New cars are more expensive than ever, with average prices in the United States surpassing $50,000 in September for the first time, up 3.6% from 2024, according to automotive research firm Kelley Blue Book. Luxury cars are driving that growth, according to KBB. The average price of a Porsche vehicle is $115,407, the highest of any standard production manufacturer. A Ferrari, on average, costs four times that amount.
But defining luxury is difficult when you can spend $42,000 on a Mercedes-Benz or €114,000 on a pick up from Ford. In a world of tailored cashmere socks and gold-plated toothbrushes marketed as luxury experiences, the term has become so ubiquitous that it has almost lost all meaning.
In the case of cars, there is no correlation between luxury and price; It’s not strictly about pure power or a lot of carbon fiber. Executives from brands such as Bentley, Bugatti, BMW, Pagani and Rolls-Royce give their take on luxury in the modern era.
What is clear is that luxury encompasses more than past glory, as once prestigious brands like Maserati fall into low resale values and Jaguar remains comatose. It’s also more than the price of materials, as advanced software often confers more status than finishes or fancy rugs. And it’s not necessarily an extravagant design, although discreet luxury is now a thing of the past. Instead, automakers are striving to create tight-knit communities among their buyers and collectors, catering to their personal preferences and needs in every interaction and developing increasingly advanced ways to customize vehicles to reflect customers’ personal taste.
For many car buyers, luxury is about the one thing you can’t buy: minutes on the clock. “Luxury is how we manage your time,” says Adrian van Hooydonk, BMW Group Design Director. It’s about the automaker “respecting people’s time, and we want to make sure the time spent on our product is rewarding.”
Others say luxury is about providing informal access to the company’s management and artisans, allowing a familiarity that makes customers feel welcome. “We talk to them constantly,” says Christopher Pagani, Pagani’s marketing director and son of the founder. (It’s true that it’s easier for high-end automakers to keep in touch with customers. Pagani has made approximately 600 cars since Horacio Pagani opened its doors in 1992.)
The connection extends to potential customers. Ferrari wrote a plan to generate more fans than owners by limiting production and making existing customers wait years for the privilege of purchasing a special model. Porsche has achieved that status, too, generating excitement around its most anticipated models, which triple their sticker price at dealerships in the most competitive markets.
Exclusiveness
This aspect of luxury is about fostering enthusiasm, passion and aspiration, says Frank-Steffen Walliser, president and CEO of Bentley Motors. Exclusivity can be enjoyed even from a distance, through the pleasure felt when looking at such a precious object or when purchasing similar items, such as books, watches and clothing. It is an entire universe that many covet and that only a few can access.
“We need fans,” says Walliser. “It’s true for all brands. Customers need to be admired for the decisions they’ve made.” In fact, drawing on a lineage of celebrated owners, daring adventures and successful exploits enhances a brand’s appeal.
Like France’s oldest luxury houses, such as Hermès and Goyard, the most prestigious car brands remain relevant today, even as they pride themselves on decades of history in their archives, reinforcing their raison d’être and captivating both new audiences and loyal enthusiasts.
“Luxury brands are about storytelling,” says Jaguar CEO Rawdon Glover, who is working to revitalize the nearly century-old brand with new vehicles due in 2026. “You buy a luxury car because you want it, not because you need it, so we have to create that irrational desire.”
This is where established car brands dominate electric vehicle startups. Despite the altruistic bent of their marketing and the apparent smooth acceleration of their cars, electric vehicle startups lack such deep institutional memory. Tesla introduced its first vehicle in 2008; Lucid and Rivian did it in 2021. Aston Martin, Bentley, BMW, Bugatti, Mercedes-Benz and Rolls-Royce are each more than 100 years old. Ferrari and Porsche are more than 75 years old.
A rich heritage emphasizes the history of the origin of a car’s curves or sportiness. It also accentuates high-quality materials and artisanal elements that can cover it with fine woods, supple leathers, sheepskin mats or exquisite carbon fiber.
The craftsmanship achieves the double objective of providing a tactile and visual guarantee that the product is well made and differentiating it from others manufactured at a lower price.
Innovation
Innovation can help a younger brand overcome a lack of lineage. Swedish Koenigsegg Automotive is just over 30 years old, but it has a passionate fan base and owners thanks to its engineering that powers its million-dollar supercars to record numbers. The Italian Pagani has cultivated collectors obsessed with its pioneering use of active aerodynamic flaps and the development of novel composite materials such as carbon-titanium.
At BMW, innovation is integrated into an already established narrative that states that the owner should feel comfortable in the car. It’s a delicate balance, Van Hooydonk says, which is why the company offers anyone inside the car the freedom to choose when to access the technology or not. It hides some speakers, buttons and sensors behind natural materials such as wood or fabric, and the technology is activated only with user interaction. “If they’re going to spend that much money on a car, they want it to be state-of-the-art,” he says. “At the same time, they don’t want the technology to always be in sight. That’s why we call it shy technology. The technology is there when you need it, but it’s not overwhelming.”
For the super-rich, innovation goes far beyond incorporating artificial intelligence into the car with the help of Google. Transformation techniques to make the car feel unique are essential, as authentic luxury reflects the buyer’s deepest identity. The car must have personal, even private, meaning. “The clear trend we are seeing is a growing demand for customers creating things that are special and specific to them,” says Chris Brownridge, CEO of Rolls-Royce. “Sometimes it’s about celebrating a relationship, a family member, or your dog. It can be a public accomplishment or something personal that no one else knows about.”
All of the new Phantoms that Rolls-Royce sells are highly customized, according to the company, raising the price of the company’s flagship sedan well above its base price of about $500,000, often doubling or tripling it. Special commissions, such as the Phantom Syntopia, created with Dutch fashion designer Iris van Herpen, are worth much more.
The vision of Syntopia is to emulate the beauty of fluid movement. Artisans created a unique iridescent liquid exterior paint and coated it with a mirror effect pigment to imitate deep waves. They developed silk-blend textiles that evoke the surface of water at night and created a ceiling upholstered in a single flawless skin, adorned with almost 1,000 sparkling fiber optic lights and 162 crystal organza petals, applied by van Herpen’s own couture team. The project spanned four years from inception to completion in 2023. Upon its debut, it disappeared from public view and into the owner’s private collection, the epitome of ultimate luxury in the modern world: understanding why something you own is special, even if no one else can see it.
