Premium and luxury cars returned to retail value growth in 2020 following two years of negative growth at the end of the review period. This comes despite the almost overwhelmingly negative impact on the sale of luxury goods from the near-global COVID-19 lockdown.
From August 2020, the Turkish government increased the amount of tax payable on imported vehicles as part of its wider “special consumption tax” on certain consumer goods. This special consumption tax has existed since 2002.
Mercedes-Benz Turk was among the car producers that temporarily suspended production in April 2020 due to supply chain disruption as the full impact of the COVID-19 pandemic spread across different countries. Additionally, car dealerships faced inventory shortages, which had the potential to further impact sales as demand began to recover.
Premium and luxury cars is set to record double-digit average retail value growth at constant 2020 prices over the forecast period, outperforming the average for luxury goods overall. Growth is also set to remain strong for every year of the forecast period, contrary to the weak and/or fluctuating growth expected for other categories.
Despite the forecast of continued growth in value sales over the forecast period, car manufacturers are likely to take time to recover from both the shutdown of production plants and supply chain disruption caused by the COVID-19 pandemic in 2020. This led to a collapse in the profits of certain players and created liquidity problems for others.
There is a strong chance that the COVID-19 pandemic will herald a lasting change in the way consumers purchase premium and luxury cars over the forecast period, driven by shifting consumer attitudes to the role of the e-commerce channel as a viable option in this arena. Luxury electronic car manufacturer Tesla has already made the transition to e-commerce by announcing a shift to online-only sales, with showrooms used solely for marketing and experiential purposes.
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This report originates from Passport, our Luxury Cars research and analysis database.
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