Luxury car sales are growing rapidly, while the mass market is struggling. While mainstream car sales are expected to remain flat through 2031, luxury segments are projected to grow by 8% to 14% annually. Luxury brands also have much higher profit margins compared to mass-market automakers.
One reason for this growth is that luxury cars now offer advanced technology, autonomous driving features, and high-end electric powertrains.
Wealthy consumers, especially in regions like China and the Middle East, are driving demand. The number of high-net-worth individuals is rising, and more of them are looking for exclusive, high-tech vehicles.
Why Is the Luxury Market Thriving?
Luxury cars are segmented by price. Vehicles priced between $80,000 and $149,000 are expected to grow over 8% annually, reaching more than 3 million units by 2031.
Cars in the $150,000 to $500,000 range will also see strong demand, with over 300,000 units sold in the $150,000-$299,000 segment and nearly 40,000 in the $300,000-$500,000 segment.
Ultra-luxury vehicles above $500,000 will see increasing competition, with new brands entering the market and more models being launched.
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Electric vehicles will play a major role in luxury car growth. By 2031, 65%-75% of vehicles in the $80,000-$149,000 segment will be electric, and the $150,000-$500,000 range will see 80%-90% EV adoption.
Even ultra-luxury brands are shifting toward electric power, though their transition will take longer due to legacy issues with combustion engines.
SUVs will dominate the luxury EV market, with many brands introducing high-end electric SUVs. By 2031, SUVs are expected to make up 40% of luxury car sales, up from 25% in 2021.
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China is expected to be the fastest-growing luxury car market, with annual growth of 14% through 2031. The country’s rising number of millionaires and billionaires is driving demand, making it a key region for luxury automakers.
