Posts Tagged ‘Ferrari’

More on income elasticity – wanna buy a Bentley?

December 20, 2008

I am starting to think that my fixation (see 1 and 2) on products suffering in the current frosty economic climate might well be case of schadenfreude. But I soldier on…

bentleyNow another likely candidate is getting attention – premium and luxury cars. It seems the market for such vehicles is proving fairly inhospitable, as manufacturers cut prices in the face of lower demand and more testing finance requirements. This has flowed on to the second-hand market too.

Unlike champagne and fancy shirts, cars are not consumption goods per se, so its not necessarily that consumers have stopped partaking of the good, rather they are deferring upgrading models etc. So, it looks like it isn’t just the mainstream auto companies in the firing line. Car manufacturers have nowhere to hide…just ask Porsche.

Time for a rethink of business models and strategic positions?

Now, surely there must be some more surprising examples of businesses suffering as incomes become more uncertain (or drop)…