For the crowd gathered at the MGM Grand casino in Detroit last weekend, chef Wolfgang Puck’s lamb with mint-cilantro vinaigrette and wild-mushroom risotto were only the appetizer. The main draw was $8 million worth of cars from the likes of Ferrari, Lamborghini and Maserati.
The $500-per-head event showed how the recovering U.S. economy has brought conspicuous consumers out of hiding in the world’s biggest supercar market. The return of big-spending Americans is especially crucial for Italian brands as the debt crisis cripples demand in southern Europe.
“Come to Beverly Hills, you’ll see more Ferraris than in Italy and more Bentleys and Rolls-Royces than in England,” Puck said while checking out a $295,000 Ferrari FF. “People in America want to show their wealth, while in Europe they want to hide it.”
Global sales of cars costing more than 100,000 euros ($130,000) are forecast to beat the 2007 peak this year and will climb 35 percent to almost 540,000 by 2015, according to IHS Automotive. The jump, fueled by a 52 percent surge in North America, offers some relief for Fiat SpA (F), which owns Ferrari and Maserati, and Volkswagen AG (VOW), parent of Lamborghini and Bentley, as European auto demand slumps to an almost two-decade low.
As a sign of the importance of American buyers, Maserati chose the North American International Auto Show in Detroit this week for the grand introduction of its latest Quattroporte sedan. The $130,000 model hasn’t officially been presented in Italy, where sales have all but dried up. With austerity measures and a government hunt for tax cheats that targeted luxury-car drivers, Maserati sold fewer than 100 cars in its home market last year.
Italy “had been our No. 2 market for five, six, seven years” accounting for as much as 10 percent of sales at the 2007 peak, said Maserati brand chief Harald Wester. “Europe will remain a very, very difficult territory.”
Luxury-auto sales plunged 44 percent last year in Italy, hurt by higher taxes on upscale models, according to Italian auto-industry group Unrae. Ferrari dropped 57 percent and Maserati was down 72 percent.
While European car demand is headed for a sixth straight annual decline this year, the U.S. is entering its fourth year of recovery from the financial crunch, according to Bloomberg Industries.
“The mood has definitely improved” in the U.S. supercar market, said Marco Mattiacci, president of Ferrari’s North American operations. “We see progress in the segment, progress in the confidence of consumers.”
The prospects are a reflection of the growing ranks of wealthy Americans. U.S. households with more than $300,000 in annual disposable income are forecast to reach 4.6 million this year, 30 percent more than in 2009, and easily outnumbering China’s 1.3 million, according to Euromonitor International.
With demand on the rebound in the U.S. and wealth growing in Asia, ultra-luxury brands are expanding. Maserati will add the compact Ghibli sedan this year and its first sport-utility vehicle, the Levante, in 2014 in a bid to boost sales eightfold to 50,000 vehicles by mid-decade.
VW’s Lamborghini and Bentley are also developing SUVs, while the German manufacturer’s Porsche brand will introduce the 918 Spyder hybrid supercar and start production of the Macan compact SUV this year.
Bayerische Motoren Werke AG (BMW)’s Rolls-Royce in March will debut the Wraith, which it describes as the “most dynamic and powerful” model in its 108-year history. Daimler AG (DAI)’s Mercedes- Benz will expand its S-Class line to five new variants after revamping the luxury sedan.
Lamborghini increased sales 30 percent to 2,083 vehicles last year, boosted by a 53 percent jump in the U.S. In Italy, its sales fell 20 percent, outperforming a 50 percent plunge in supercar sales in the country because of a backlog of orders, which have now been fulfilled.
Higher taxes and checkpoints by financial police targeting people driving expensive cars “blocked” what was left of demand in Italy, Lamborghini Chief Executive Officer Stephan Winkelmann said in a Jan. 14 interview. “We don’t see a recovery next year” in Southern Europe.
Back at the MGM in Detroit, wealthy consumers circled the two dozen ultra-luxury models on offer. With about $2.5 million worth of cars sold that evening, there was no sign of the hesitation that weighed on demand during the financial crunch, when the U.S. auto industry nearly collapsed.
“Detroit is moving up,” said Puck, who is planning to buy a Ferrari. “It is getting good again here.”
Laith Farjo, 43, an orthopedic surgeon from the Motor City, perused a Ferrari 458 Spider, Aston Martin Vanquish, Lamborghini Aventador and other cars, looking for a replacement for his Maserati GranCabrio. He’s partial to the Italians, a welcome sign for the debt-strapped country’s elite brands.
“There’s nothing like the Italian cars in styling,” he said. “Ferrari will be the next step.”
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