The Luxury Automobile Report 2007: Who Buys Luxury Automobiles, What They Buy and Why They Buy

Published by: Unity Marketing Inc.

Published: May. 1, 2007 - 128 Pages

Table of Contents

Chapter 1 — About the Luxury Market

• Figure 1: Leading Luxury Marketers Revenues, 2003-2006

Some 32.5 million Households Rank among the Nation's Top 25 percent

• Figure 2: Number of Households by Income, 2004 & 2005

Number of Households at the Highest Income Levels Are Growing Fastest

• Figure 3: Total number of affluent households

Demographics of the Top 25 Percent of Americans

• Figure 4: Household income by age, 2005

Affluents Make More, Spend More and Save More

• Figure 5: Annual expenditures, 2005: Average U.S. households compared with affluent

Trends in Affluence

• Figure 6: Ages of Affluence, number of affluent households 40 and under and over 40 years old

Lifestage Changes Impacts the Luxury Market

• Figure 7: Triggers for luxury purchases, 2006 & proj. 2007 (Source: Luxury Tracking, 4Q06)

Luxury Consumers’ Plans for Home Changes Reduced from 2005

• Figure 8: Home Changes 2005 (2Q2005 Luxury Tracking), 2006 and proj. 2007

Luxury Consumers Rose from Middle-class Backgrounds

• Figure 9: Financial status of family of origin (Luxury Tracking, 2Q04)

New Luxury Market Paradigm — From Things to Experiences

Experiences Provide the Greatest Luxury Satisfaction

• Figure 10: Source of Greatest Luxury Satisfactions (1Q2006 Luxury Tracking)

• Figure 11: Sources of Greatest Luxury Satisfation by income

Chapter 2 — Luxury Market Topline Findings. 2005 & 2006

Luxury consumer spending declines in 4Q2006

• Figure 12: Luxury Consumption Index thru 4Q2006

Luxury Consumers’ Feelings of Financial Well-Being

• Figure 13: Financial Well Being

Luxury Consumers and Reported Spending Trends

• Figure 14: Luxury Spending Trends Past Twelve Months

Luxury Consumers and Their Spending Expectations

• Figure 15: Expected Spending on Luxury Next 12 Months

Luxury Consumers’ Confidence in Financial Health of the Country

• Figure 16: Overall Financial Health of Country

Luxury Consumers Confident of Their Personal Ability to Handle Economic Turmoil

• Figure 17: Financial Prospects Next Twelve Months

Total Luxury Purchase Incidence

• Figure 18: Overall Luuxry Purchase Incidence (All Affluent Consumers)

Luxury Purchase Incidence, 2006 & 2005

• Figure 19: Luxury Purchase Incidence

Luxury Consumers’ Average Spending Increases in 2006

• Figure 20: Average Spending on Luxury, 2004-2006

Luxury Spending by Income Segments in 2006

• Figure 21: Luxury Spending by Income Segment

Luxury Spending by Income Segments 2005 and Comparison 2006

• Figure 22: Luxury Spending by Income Segment 2005 and comparison 2005 to 2006

In 2006, Young Affluents Out Spent Older Luxury Consumers

• Figure 23: Luxury Spending by Age - 40 and Under and Over 40

Men Spent More than Women in 2006

• Figure 24: Luxury Spending by Gender

Luxury Consumers Remain Value-Oriented

• Figure 25: Most Recent Luxury Purchase Bought on Sale or at a Discount (4Q2006 Luxury Tracking)

Luxury Market Reached $834.9 Billion in 2006

• Figure 26: Luxury Market Potential

Non-Store Retailers Continue Their Vital Role in Luxury Shopping while Department Stores Stay the Favorite

• Figure 27: Where People Shopped for Home and Personal Luxuries

Nordstrom Takes Lead as Luxury Shoppers’ Favorite Luxury Department Store and Target Is Tops for Mass and Discount Stores

• Figure 28: Store Brand Usage for Any Luxury Shopping

Luxury Consumers’ Favorite Magazines

• Figure 29: Luxury Consumers Favorite Magazines

Chapter 3 — Personal Luxuries & Automobiles

Personal Luxury Purchases Made by Three-Fourths of Luxury Consumers

• Figure 30: Personal Luxury Purchase Incidence, Including Automobiles

Personal Luxuries Spending Up Significantly in 2006

• Figure 31: Personal Luxury Spending,

Automobiles & Recreational Vehicles . Purchase Details

Amount Spent on Automobiles & Recreational Vehicles

Luxury Automobile Brand Usage

• Figure 32: Luxury Automobile Brand Usage

Key Influencers for Automobiles

• Figure 33: Automobile Key Influencers for Purchase (2Q2006 Luxury Tracking)

Luxuries They Have and Own

Luxury Toys

• Figure 34: Luxury "Toys"

Typical Luxury Consumer Owns One Luxury Automobile

• Figure 35: Number of Luxury Automobiles Owned

Chapter 4 — About Butterflies & Other Segments in Luxury Market

• Figure 36: Atttitudes about Luxury

Segmentation Analysis of Luxury Market — Four Segments Identified in Luxury Market

• Figure 37: Luxury segmentation analysis mean values

Butterflies Emerge as Largest Luxury Consumer Segment

• Figure 38: Field Guide to the Luxury Personalities

Luxury Cocooners are Still Enveloped in Their Luxury Cocoons

Cocooners Spend More on Home and Home-Focused Experiential Luxuries

Butterflies Have Emerged from Their Luxurious Cocoons

Butterflies Spend Freely on Luxury

Luxury Aspirers Have not yet Reached the Level of Luxury to Which They Aspire

Aspirers Don't Spend as much on Luxury

X-Fluents Live the Lifestyle of the ‘Rich and Famous’

X-Fluents Spend More on Luxury

Chapter 5 — About Luxury Consumers and Their Likelihood to Purchase Luxury vs. Ordinary Goods and Services

Majority of Luxury Consumers Trade Down Not Up to Luxury

Majority of luxury consumers trade down most often

• Figure 39: Purchase Luxury Regularly, Occasionally, Rarely by Product/Service Category

Ability to Spend for Luxury Doesn’t Translate into Willingness to Spend

• Figure 40: How Often Super-Affluent Luxury Consumers Indulge in Luxury

Chapter 6 — Luxury Consumers & the Internet

Luxury Internet Shoppers

Internet Widely Used to Research and Purchase

• Figure 41: Luxury Consumers' Use of the Internet

Entertainment and Recreation Lead Internet Purchases

• Figure 42: Kinds of Products and Services Bought on the Internet

Super-Affluents Lead the Internet Spending Pack

• Figure 43: Average Spending on All Goods & Services over the Internet

Typical Luxury Consumers Spends about 5 Hours a Week Shopping Online

• Figure 44: Average Number of Hourse Used for Interent Shopping/Research on a Weekly Basis

Typical Luxury Consumers Spends about 13 Hours Per Week Online for Non-Shopping Purposes

• Figure 45: Luxury Average Number of Hours Used on Internet for All Other Purposes Besides Shopping Weekly

Convenience and Comparison Key to Internet Shopping

• Figure 46: Features Luxury Shoppers Consider Very Important for Using the Internet for Shopping

Shipping and Handling Charges Discourage Luxury Internet Shoppers

Luxury Consumers’ Attitudes about Internet Shopping

• Figure 48: Attitudes of Luxury Shoppers about Internet Shopping

Chapter 7 — Luxury Gifting

Introduction

Luxury Gift Spending

• Figure 49: Luxury Consumers' Gift Giving Spending by Demographic Segment, 4Q2005

Holiday Gift Lists Number 12 People

• Figure 50: Number of People on Christmas Gift List

Entertainment & Recreational Items and Clothing & Fashion Accessories Tops Luxury Gifters’ Gift Lists

• Figure 51: Types of Gifts Purchased

Department Stores, both Discounters and Traditional, Were Their Favorite Place to Shop for Gifts, with Electronics Stores Very Close Second Choice

• Figure 52: Where Luxury Consumers Shopped for Holiday Gifts 2005

Luxury Gifters’ Gifting Trends

• Figure 53: Trends in Luxury Gifting

Luxuries as Gifts Holiday 2005

• Figure 54: Luxury Purchase Incidence & Percent Bought As Gifts

Christmas Gift Plans 2006

Luxury Consumers Plan on Spending Just Under $2,000 on Christmas Gifts This Year

• Figure 55: Planned Christmas Gift Spending 2006

Christmas Gift Spending by Demographic Segment

• Figure 56: Planned Christmas 2006 Gift Spending by Demographic Segments

When Luxury Consumers Started or Will Start Christmas Shopping for 2006

• Figure 57: When Luxury Consumers Started or Will Start Christmas 2006 Shopping

Number of People on Luxury Consumers’ Gift Lists

• Figure 58: Number of People on Luxury Consumers' Gift Lists compared with All Consumers

Gift Categories Luxury Consumers Are Very Likely to Purchase for Christmas 2006

• Figure 59: Gift Categories for Christmas 2006

Likelihood to Purchase Luxury Versions of Gift Categories

• Figure 60: Likelihood to Purchase More Luxurious Version vs. Ordinary, Everyday Version

Where Luxury Consumers Will Shop for Christmas 2006 Gifts

• Figure 61: Stores Where Luxury Consumers Are Very Likely to Shop for Christmas 2006 Gifts

Trends in Luxury Consumers’ Christmas Gifting 2006

• Figure 62: Trends in Christmas 2006 Gifting

Chapter 8 — About Influencers and Motivators for Luxury Purchases

Luxury Consumers Just Want to Have Fun

• Figure 63: Motivators Rated Very Important When Purchasing Luxury

Happiness Is the Ultimate Luxury

People have a happiness ‘set point’ that is resistant to change

Money doesn’t buy happiness, in fact the pursuit of wealth may make people less, rather than more happy

Chapter 9 — Status & the Luxury Consumers

Attitudes about Status

• Figure 64: Attitudes about Status

Personalities of Status

• Figure 65: Personalities of Status

• Figure 66: Status Personalities Attitudes

Consensus Connie Goes Along with the Status Quo

Sarah the Status Seeker Places a Priority on Prestige

Quality Magnet Martha Is Driven to Buy the Best

Anti-Status Andy Rejects the Trappings of Status

Lifecycle of Luxury Brands’ Status Tied to Consumers’ Age

• Figure 67: Status Attitudes Most Closely Associated with Younger Consumers

• Figure 68: Anti-Status Attitudes Most Closely Associated with Older Luxury

Consumers

Maintaining Luxury Consumers’ Desire for Status Through the Acquisition of Luxury Is Good for Luxury Marketers

Counter Trend toward Anti-Status Is Taking Hold

Appendix A

Research Objective

Research Methodology

Income Demographics

• Figure 69: Income Demographics

Gender 126

Age Distribution

• Figure 70: Age Distribution

Other Demographic Variables

Survey Questionnaires

Abstract

• X-Fluents (Extremely Affluent) who spend the most on luxury and are most highly invested in luxury living;
• Butterflies, the most highly evolved luxury consumers who have emerged from their luxury cocoons with a passion to reconnect with the outside world. Powered by a search for meaning and new experiences, the butterflies have the least materialistic orientation among the segments, yet they spend nearly as much as the X-Fluents on luxury;
• Luxury Cocooners who are focused on hearth and home. They spend most of their luxury budgets on home-related purchases;
• Aspirers, those luxury consumers who have not yet achieved the level of luxury to which they aspire. They are highly attuned to brands and believe luxury is best expressed in what they buy and what they own.

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