The most luxurious brands such as Rolls-Royce, Bentley, Porsche and BMW have reported record sales.
Bentley sold 14,659 cars last year, an increase of 31% from the year before and a record for the company. Porsche, also owned by VW, sold 301,915 cars, an increase of 11% world-wide. Both brands posted growth in the U.S., Europe, and China.
Rolls-Royce, owned by Bayerische Motoren Werke AG, whose tailor-made superluxury cars have starting prices of more than $300,000, sold a record 5,586 cars last year, up 49% from the year before.
Martin Fritsches, president of Rolls-Royce Motor Cars Americas, told the Journal that buyers of superluxury cars like Rolls-Royce are younger today. The average age of a customer is about 43 years old, which means many of their clientele are in their 30s.
In part, Mr. Fritsches said, Rolls-Royce’s wealthy customers have been sheltered from the hardships felt by many during the pandemic. They benefited more from the economic recovery, the cryptocurrency boom and soaring stock prices. And many of the buyers are first-time Rolls owners, he said, including young entrepreneurs who got rich on the stock market and cryptocurrencies.
Meanwhile, when we took our Honda Odyssey in for an oil change recently, the dealer had exactly 0 new Hondas in stock. If we’d wanted to replace our Odyssey it would have required paying 20% more than we paid a year ago and waiting 1-2 months.
“Global chip shortage: Everything you need to know” (TechRepublic, November 2021):
A shortage in the supply of semiconductors first hit the automotive industry during the COVID-19 pandemic and has had a cascading effect, causing global disruption. The shortage can be traced back to the first half of 2020, when overall consumer demand for cars declined during the lockdown. This forced chip manufacturers to shift their focus to other areas, such as computer equipment and mobile devices, which spiked in demand with more people working remotely.
Part of the problem is that the return on investment isn’t compelling enough to build new foundries—which cost billions of dollars and take years to construct—to satisfy the demand by automakers, according to IDC. Automakers operate in a just-in-time environment without business continuity planning, according to Mario Morales, program vice president of the semiconductor group at IDC.
After they canceled orders early on in the pandemic, disgruntled suppliers turned to other markets that were still doing well, such as consumer electronics, and automakers found themselves lower on the priority list.
I still don’t get it. A replacement for our Odyssey is at least $7,000 more than we paid for the identical vehicle in January 2021. Let’s say that Bidenflation has driven up Honda’s costs by $3,000. Assuming that Honda made a profit on our Odyssey, Honda could still pay up to $4,000 for some chips and sell Odysseys at a profit (they’d have to raise the price to dealers so that Honda recovered the $3,000 premium over sticker that the dealer is currently charging). Apple can’t pay $4,000 for the chips that go inside a $1,400 iPhone. Microsoft can’t pay $4,000 for the chips that go inside a $500 Xbox Series X. Econ 101 suggests that the car companies can outbid anyone other than the U.S. military for the chips that they want. How is it possible that integrated circuit supplies are limiting car production?
Consistent with the WSJ article, I did find a Cadillac available for immediate delivery near the Venice (FL) airport:
“Microlino EV, Adorable Two-Seater, Going into Production in Europe” (Car and Driver):
“Our goal was to deliver the first vehicles to customers within the end of the year , but the worldwide supply-chain chaos is affecting us like many other carmakers,” the company indicated. “Despite our preparations to order crucial parts way in advance, the situation has gotten much worse and is now affecting more and more parts. Now, even commodity parts like simple connectors for the wiring harness have become scarce and have lead times of up to 50 weeks!”