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"International students" SO true. I lived nearby Syracuse University and I'd see Asian foreign students literally driving Bentley's, Ferrari's and Lamborghini's through the harsh, cold, salty winters at school. Money is no object to people like that. All while wearing Canada Goose jackets, Prada/Gucci sunglasses, and the latest $5000 purses. They live in a whole different world than the rest of us.
If that makes you mad, don't forget that they come from a ruthless dictatorship and they can't predict what the Party will arbitrarily decide to do to they networth and/or livelyhood. The CCP giveth and the CCP taketh away.
Asians are typically a different beast altogether in terms of spending for things like this. While westerners think that they bought a luxury product because they "like it", asian buy these luxury goods because they have a "face" to maintain. Basically, as an asian, you can't look poor, even when in reality you're eating instant ramen at home. Many asian will go on debt just to buy a luxury good so they can look good in front of their peers, it's just the culture. Even if their parents isn't as rich back home, they have to keep their "face" up, else they'll be looked down upon, or at least that's how it is in their home country. But most likely it's just rich parents, or just kids that couldn't get into good uni at their country, so they have to save face by going abroad. Kinda feel sorry for the latter though, sometimes their parents are just scraping by, but have to buy expensive goods for their kids because they don't wish their kid get looked down and bullied or something. It's sadly a common story for where I'm from.
That ad read was a buzzword bingo. Good for Modern MBA getting that coin, but it’s seldom a good look if a company that no one has ever heard of is now sponsoring TH-cam video creators.
Isn’t that a conundrum? The point of advertising is to spread the word to begin with but kind of shows your skepticism towards up and coming small businesses.
@@AwesomeLifeguardBecause where is the money for youtube sponsors coming from? Come on man we all watch this channel, ask yourself the relevant questions.
I think you have confused a maker having only premium cars in thier selection. A-class is the entry model for the maker but a premium for that small compact. Where the s-class is straight premium
yeah, electric motorcycles are looking really bad right now. anyone remotely interested in motorcycles knows that. Also he is wrong about harley not having built an ev. A really bad look
He's wrong too. Motorcycle brands HAVE innovated.. but consumers don't WANT innovation. They want classic motorcycles. If they cared about utility or fuel economy, they'd buy a scooter.
@@harrystyles7466same for cars, most ev start up’s fail miserably, the infrastructure isn’t even there for it to be mass adopted anyway, I don’t think the future of cars is electric but will be incredibly fuel efficient cars
@@poochyenarulez Ironic that in a video about luxury brands they don't recognize the fact that motorcycles are also a luxury. Nobody needs a motorcycle.
The VW group now has five tiers of premium. Skoda at the bottom, followed by Seat, Volkswagen, Audi, and Porsche. They also own Bentley, Lamborghini, Bugatti, and some amount of Rimac. Additionally, your sponsor needs a fact check. Harley Davison has made the electric Livewire model.
Interestingly, the owners of luxury cars probably don't drive thrm that much. I once worked for a major auto insurance company and everytime I pulled up a customer record were they owned a luxury car they always had at least one non luxury car like a Toyota. Often they had several regular cars and only one luxury car.
Loved buying my insurance for my Porsche from a new insurance company that charged a low base plus each additional mile driven since didn’t drive it much.
They are, because fuel technology cannot be improved much more meanwhile electric vehicles are improving at fast pace. In less than 5 years they will have more performance and cost less. And in 50 years, electric vehicles will produce so much power that they could even fly(if that becomes legal in the future). I love fuel vehicles but the technology for them is already fully developed, its not like we can make a 500hp car that sips fuel, meanwhile a 500hp electric vehicles that are cheap to run, already exist, like tesla model 3 performance
@@nocapproductions5471what is the logic behind continuous exponential or even continuous linear growth of electric vehicle performance? Just because something has an impressive trajectory of improvement during its infancy, doesn't mean that the growth can be maintained indefinitely.
@@nocapproductions5471Electric motors have been producing enough power for decades to create lift. It's the power source and charging that bottle neck electric cars. The materials required for batteries aswell. Battery technology is going to get more and more critical, yet the energy to weight ratio is still low.
@nocapproductions5471 batteries will never achieve the energy density of hydrocarbons. Charging speeds will never match liquid pumping speeds. Electric will always be less convenient than gasoline and convenience is king, because as the old adage goes, time is money. The only way electric outpaces ICE is through legislation. Natural adoption will never occur. Hybrids might be the future, but electric is unlikely to be.
It's quite possible that a lot buyers don't really want a Purosangue. They want to be on the customer list so they can buy the next supercar so they can be on the loyal customer list so they can buy the next limited edition supercar.
There are far more wealthy people who can afford basic Ferrari, Lamborghini and McLaren models even at 500k. The real game changers in the exotic space are the bespoke builders at ultra low volume: Pagani and Koenigsegg among few others. The luxury market is watered down with too many poorly built 500k cars that fall apart in a few years or less. This nuance of poor quality vs high performance was tolerated in the 70s, 80s and 90s when the wealth needed to afford even a Porsche was less present. Now your mom is driving a Porsche SUV and you can buy a used Maserati for 18k$. In the pursuit for market share and volume the companies are treading a really fine line of profit vs exclusivity. At the end of the day most of them need to fail and rebuild as a new name multiple times to create the rarity needed. The second biggest issue is driving feel. Electric engines, highly electric suspension and transmissions that shift perfectly sort of ruin the experience of owning and driving these cars. The companies that will exist in the future will ultimately reject most modern utilities and instead blend them delicately over the years. 0-60 in 2 seconds isn't special when a Tesla can do that. A manual transmission car that demands driver attention and restraint is truly exclusive.
damon is gonna fail with a mission statement like that. The broad majority of motorcyclists like the no nonsense nature of older designs and the technology being put into them by tech companies like damon and zero is just shooting them in the foot.
no one wanting to ride an ev bike is also contrary but its an ad read so its not like theres much to read into. Im a vintage bike guy anyway my newest is a 99 if i was gonna go get one today...probably not gonna be a duroc i mean damon. But old crotchy habits do constrain development of sales product...kinda . Motogp is still driving plenty of innovation at most companies.
Unlike jewelry, which has almost no practicality whatsoever, luxury vehicles happen to have "some" practicality due to their nature as a vehicle that could be used to travel from place to place. The introduction for this video gives me the impression that the topic isn't approached from the perspective of the would-be buyers, who are more likely to use the vehicles as a symbol of prestige, that they can not only afford the sticker price, but also the costs of maintaining the vehicle that it looks pristine in spite of the use. From a mercantile perspective on luxury goods, the value of what you're selling is only as high as the value people are willing to pay for it, and the reputation of a manufacturer and its product are more important than the actual utility it provides. If you wish to see why people buy these products in spite of their practical drawbacks, you may want to do a deeper analysis of who buys these products, their demographic, and then ask them what each brand is associated with, and why- Some reasons to note are buying one to become closer to a fellow of the same demographic, the policies and past/recent history of the company, the appearance, and so on. Whether or not it's all practical is unlikely to be part of the consideration.
This 100%. Trying to analyze luxury cars through an automotive lens is a futile exercise. The best comparator is to put it up against luxury goods brands like LVMH, Rolex etc. and talk about what drives demand and price for these items.
@@zunaidparker They are not comparable to luxury goods like watches and handbags because all luxury cars depreciate whereas Hermes bags and Patek watches appreciate and are investments that deliver market exceeding returns in most cases. Luxury cars are simply very expensive consumption goods and status symbols.
@@sonnykoh3049 thats also not true because it really depends on which car you buy. Rare cars like high end 911s, limited Ferraris, Paganis etc have only risen in value many are now worth double of what they cost new, there is even a whole market of speculation around new releases, some even buy these cars soley as an investment. Cars like Panameras, Cayennes, Maserati were you have a big supply depreciate like shit.
@@a.k8069it's an ad for the stock. They have never built a production motorcycle and don't have a factory. They IPO'd last month and the stock is down 80%. It's vaporware that took a bunch of venture capital and pre-orders and is now on its way out.
the electric motorcycle company's copy is hilarious. walk into any motorcycle showroom and you can find find a high-spec bike with nearly every modern computerized and advanced materials feature you'll find on new cars. It seems like they're actually trying to appeal to potential new riders, which is a small segment with a lot of churn. I'm sure there is *a* market for electric sport bikes but it'll always be very small.
The only people who are even in the market for a bike in that price range are dentists and accountants going through a midlife crisis... It would probably work with that crord
Porsche also has the Macan EV. Also, even though the Audi Q5 and Macan were to share a platform, Porsche needed to heavily modify the platform for the Macan-- they're pretty different.
A common mistake in the writing of these videos is mistaking singular and plural. It’s not “the number continue to grow” it’s “the number continues to grow”. It doesn’t matter if you put a plural word in between. It’s still “the number of cars continues to grow” as “continues” is connected to “the number” not “cars”.
If you took any intro to accounting class, you learned the Seven Year Rule. For things like vehicles and furniture, it takes approximately seven years for depreciation to cut the value of the "asset" by 50%. Looking at something with a high price tag, like a luxury car, the absolute number is enough to be alarmed. But the maintenance costs will surely add to that enormous number. This is obviously a vast simplification, but it gives you a good enough idea. God, just imagining myself as an accountant for those influencers who buy luxury vehicles makes me shudder.
I doubt the rule of 7 years applies to cars. New cars lose value a lot faster, with 50% being reached in 2-4 years. And 10+ year old cars typically are ripe for export to the third world after another 7 years because they are too expensive to keep running in the western world. For real luxury (and by that I do not mean Porsche Cayennes selling in the thousands each month), depreciation is a bit different anyway. For one, if production is intentionally limited, prices on the secondary market are often higher. And for two, people do not buy a Ferrari because it is cheap to run and comfortable to drive or buy a hand-made mechanical watch because it keeps time so well. People buy these things as status symbols, and high purchasing and/or running costs just make them even better suited to display status
@@foobar9220 of course. Hence why I said that I was oversimplifying. The 7 year rule applies to idle items. It does not account for wear and tear, maintenance costs, and of course any kind of brand risk factors, such as the brand image of the luxury car. I would estimate the 50% mark to be reached at 3-4 years today, and with rising fuel costs, this period will likely shrink as the costs of ownership increase. This feels like it could be a fun monte carlo simulation.
Why use the word luxury when you already know the proper term is exotic? Lamborghini, Ferrari, or Porsche are NOT luxury car brands. These guys make performance sports cars, the best in the world. Sure they each have a luxury model but the entire lineage, history and the aggregate of their vehicles are performance sports cars! That is a massive difference when it comes to their clientele and and their use cases. Luxury car brands would be Audi/Mercedes/Lexus/Infiniti/AstonMartin/Bently/Rolls Royce/ etc. Porsche for example is one of the only car brands whose cars appreciate. There is a reason for that and it sure as heck isn't luxury!
Doing a DTC motorcycle company is an interesting move. I really don't think people are going to be willing to pay Goldwing money for a 150 mile range ebike though.
There's a difference between a "luxury car" and an "exotic car". The former is GUARANTEED to depreciate in value, while the latter often times do become appreciating assets due to their rarity & exclusivity.
The price depreciating curve only ends if the vehicle becomes a classic, noteworthy or even determined by people to be cool. Such as early vehicles like any Old Ford Model T or the derivatives since the historical nature of it, classic mustang or lets say even the First few Hummers. There will be a market of people willing to buy them depending on the quality Forgot to add the DeLorean as from what I have seen some car collectors do want it as a visual piece.
A quick note, the Cayman didn't come out until 2006. While the Cayman and the Boxter are based on the same platform, one is a coupe and the other is a convertible, the two cars were released a decade apart.
At the moment, Ferrari is even the most valuable car company in Europe. It is just in another league compared to all the other low volume, ultra luxury car companies
12:00 The platform is shared, but the audi R8 came out later. they did not have a shared launch and they at first were more different from eachother, slowly merging near the end of both their 1st generations.
It's gotta be a blow to the entire premise of these vehicles when they can barely overtake an electric family crossover on the track. They trade so much for performance that's not only useless the majority of the time, it's not even relatively impressive anymore.
I would say in general the influencer culture has ruined the "luxury" industry across the board. When you see these low class unaccomplished people having the expensive stuff you really don't want to be associated with people like this. More importantly these bottom feeders have increased demand making luxury stuff more expensive for the people it was originally intended for. I see that watches and collector car prices are starting to go down which is the correct direction. Porsche is not a luxury brand. It is a premium brand like mercedes and bmw. They do have very expensive cars in the 200K range but those are outliers. I think it is insane how a G wagen goes down $10K a year in value like clockwork Aston and Maserati are garbage cars. I would be more inclined to call them luxury because you have to truly be rich to eat that depreciation. Ferrari is not independent. They are owned by Fiat. I am wondering what happens when all cars have to be electric. Enzo Ferrari said you are buying the engine not the car. Now there is not going to be an engine who knows how ferrari will do. Of course there are always going to be poseurs who want anything expensive but how about the purists and actual enthusiasts?
if by garbage you mean in terms of reliability then you must also add ferrari in that list, and also, the type of people who can afford an aston/ferrari really dont give a crap about that since they also have a secondary car used as a daily driver, and besides, in terms of looks, luxury and performance in terms of price range, nothing beats aston/ferrari/mclaren
Ferrari have nothing to do with Fiat. The only link would be Agnelli. Owners: Exor N.V. (24.65%); Piero Ferrari (10.48%); BlackRock, Inc. (6.07%); Public (58.8%) Aston Martin and Maserati garbage cars!?! Be sensible. Their depreciation is still better than on mainstream mass market brands at that price point. Porsche is pretty luxury dude, they have cars costing several hundred thousand dollars plus many sell at huge premiums (RS models for example). Porsche already have the all electric Taycan and are releasing the Boxster Cayman replacement that will be electric only. Most enthusiasts are not that bothered about acceleration but more about handling, steering. styling etc. There are cars such as the ionic N that bridge the gap between electric and what enthusiasts enjoy with simulated gearing etc.
If Enzo was still alive Ferrari would have gone bankrupt because he doesn't care about reliability or innovation if that's what you are trying to say. The hate towards the new f80 divided people that know Ferrari Vs people that think they know Ferrari. The company has always been racing. Enzo started the company just to fund his racing career. V6 is part of Ferrari history. People buy Ferrari because it's red. Second reason is the performance and lastly the engine
Luxury cars do make money. It's just a point of the business cycle where there is a period every car company bleeds let it be minor or major. Have a look on the Ferrari balance sheet and Porsche annual report then you'll know the reality
I remember when the Cayenne came out a lot of purists mock it including Ferrari and Lamborghini fans. But after seeing the success of the Cayenne and Macan. They have now their own SUV/Crossover. I am waiting for Mclaren to soon follow.
Its perplexing to me how valuable ferrari is on the market, by far the most valuable italian company. Despite barely making any money compared to every other car company. 18:50 "ferraru" at the bottom right instead of ferrari.
It was spun into an independent company called RACE with exor having the control and voting rights the rest is owned by the investing public, Piero Ferrari and Blackrock.
One thing I’d like to note is that the Audi R8 was actually based on the Gallardo, not the other way around. The engine is thoroughly Audi, though “reworked” by Lamborghini. The chassis and refinement is more or less all Lambo. It’s a small, but important distinction
The main difference between exotic cars and other luxury items is that the cost can be justified by the low volume not making up the R&D costs. I guess you can make the argument for a lot of the SUVs exotic brands are putting out since most are rebadges, but I strongly disagree that they lack innovation. High R&D costs and lack of economies of scale are what kill most of the other brands. Ferrari and Porsche are the exceptions. Ferrari has such a strong brand that they can essentially price any way they want. Porsche has the mainstream SUVs that offset a lot of R&D costs for their sports cars (part sharing between the 911 and 718 lineup does help a lot though). Both charge a ridiculous amount for options since they have the brand recognition and demand for customers to be willing to pay as mentioned. Even for large automakers, they're reluctant to make sports cars, because they lack economies of scale to justify their development costs. Also, car enthusiasts are a very picky bunch, so it's mostly the ones that are well engineered with a cult following or those that share parts with conventional cars that tend to survive.
Ferrari is the one true king of the luxury auto world! Independent, well funded and developed, pristine history, ultimate brand prestige anywhere in the world most importantly they made and STILL make the best supercars!
0:56 the reason people buy these cars is not for trunk space, they purchase because of the driving experience. When you learn how to drive speed bumps and low visibility issues become a small con to a greater drive. Buying the right exotic car at the right time will be less expensive than a luxury car. Buy a Porsche 911(any model) vs S Class(not amg) the 911 will retain more value each year than the S Class. Furthermore, buy a Mercedes SUV(not a G Wagon) and you’ll see depreciation like an anchor in water
As someone who has finally reached a place in life that I can purchase a vehicle around 350k cash. I refuse to even though I thought I have wanted one my whole life. I’d rather spend that money buying my freedom from the daily grind that has gotten me here in the first place.
Nice video, lots of useful stats. It would be nice to make the content a bit less dense though. I had to pause every few seconds to study the charts, which is a bit inconvenient over a simple morning breakfast.
I always thought that as most of them are either owned by a major car company or are an engineering exercise (see pagani, czinger, koiniggsegg etc) they exist either to be a test platform, and engineering exercise or an advertisement for a companies capabilities
I was expecting the un-expectation that ModernMBA will interview both Tyler Hoovie and Car Wizard about their resale value, repairs, insurances and engineered corner cutting of parts. But great video nonetheless.
That ad is silly - a quick Google search shows that Harley Davidson has three electric models currently for sale featured on their website. Also, a lot of the focus here is on exotics rather than luxury cars. I suppose you could term all of these as "luxury items", so the label fits, but not perfectly, as prominent firms like Mercedes are left out, as well as luxury lines of the big auto manufacturers. The conclusion reached here is true for exotics, but may not be true across the board for luxury cars, e.g. I would not show production and financials of Lamborghini as a comparable case to an established auto maker looking to start a a first or additional luxury line - I'd show them Lexus. If someone wants to start a company selling low volume high cost vehicles, then exotics firms would be relevant.
I’m not sure what he meant by the title but most luxury cars literally have massive profit margins, and as an example Ferrari and Porsche make the most profit per car of any other manufacturer
Although you make a good amount of valid points, you’re still a lot that you have either missed interpreted or just don’t understand. A lot of brands are just woefully mismanaged like McLaren in Aston Martin they do need backing, but they also need the proper management to know how to market service and govern into the future effectively. As you’ve demonstrated in your own grass, Bentley is doing well, but again it is at a price point similar to Rolls-Royce. It’s not meant to be growth. Also, you’re biased due to your sponsorship needs to be noted because like the best majority of EV start ups, they have a huge mountain to climb. The future is an all electric. It’s an option, but it’s no longer the only viable way forward because it cost so much more to make an EV and the residual holding values think harder than a lot of exotic cars as well.
This video is clearly made by somebody who’s not into cars at all. I know many people who owns these cars. They easily are able to use these performance on the streets.
bullshit. if you think accelerating in a straight line on a highway is "using the performance" ur an idiot. actually, youre already an idiot for that comment
@@poochyenarulez no, but most car enthusiasts do it, find back roads to drive spirited on, or doing donuts at some abandoned warehouse, even just doing a pull on to a highway
Funny how a Hyundai ioniq that costs $45k new has a battery that's equal to it's purchase price and you're paying that out of warranty 😅😅 Porsche is alive simply because of the Cayenne and boxster nowadays.the cayenne was built on the vw tourag
I love hearing that oil tycoons and petro sultans are buying up luxury car brands because they're so out of touch with the rest of the world and are losing money over it 😂
@rsac43 I already have a Jaguar F-type R convertible (incredibly awesome car) and a new Porsche macan turbo. Paid cash for both. Next year getting an Aventador and gonna pay cash for that as well.
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actual good sponsor
"International students" SO true.
I lived nearby Syracuse University and I'd see Asian foreign students literally driving Bentley's, Ferrari's and Lamborghini's through the harsh, cold, salty winters at school. Money is no object to people like that. All while wearing Canada Goose jackets, Prada/Gucci sunglasses, and the latest $5000 purses. They live in a whole different world than the rest of us.
You mean the Chinese students who are the children of CCP politicians.
Well for many of their fellow much much poorer countrymen it’s in a different universe that they live in
If that makes you mad, don't forget that they come from a ruthless dictatorship and they can't predict what the Party will arbitrarily decide to do to they networth and/or livelyhood.
The CCP giveth and the CCP taketh away.
rich parents, nothing more
Asians are typically a different beast altogether in terms of spending for things like this. While westerners think that they bought a luxury product because they "like it", asian buy these luxury goods because they have a "face" to maintain. Basically, as an asian, you can't look poor, even when in reality you're eating instant ramen at home. Many asian will go on debt just to buy a luxury good so they can look good in front of their peers, it's just the culture. Even if their parents isn't as rich back home, they have to keep their "face" up, else they'll be looked down upon, or at least that's how it is in their home country.
But most likely it's just rich parents, or just kids that couldn't get into good uni at their country, so they have to save face by going abroad. Kinda feel sorry for the latter though, sometimes their parents are just scraping by, but have to buy expensive goods for their kids because they don't wish their kid get looked down and bullied or something. It's sadly a common story for where I'm from.
😭😭😭 “The type of car you drive really doesn’t matter when everyone is stuck in bumper-to-bumper traffic” 😭😭😭
Unless it’s a Tesla with autopilot so you can chill
Well it is a MASSIVE difference if you are automatic vs standard
Or self driving vs not self driving
Bigger flex is not having to drive to work
@@anthologyofinterest1being able to walk 5 minutes to work
That’s why I moved to NYC. Driving sucks and there’s no way around it other than avoiding it
That motor cycle company is screwed.
Nobody wants all that useless tech on a bike so good riddance
That ad read was a buzzword bingo. Good for Modern MBA getting that coin, but it’s seldom a good look if a company that no one has ever heard of is now sponsoring TH-cam video creators.
sponsorblock is a must to watch anything on yt these days; dunno how can u do without it
Isn’t that a conundrum? The point of advertising is to spread the word to begin with but kind of shows your skepticism towards up and coming small businesses.
@@AwesomeLifeguardBecause where is the money for youtube sponsors coming from? Come on man we all watch this channel, ask yourself the relevant questions.
@@genghiskhan6688skip button x12 true combo
Yeah all sponsors should be household names already 🙄. Let Modern MBA eat, man.
While i like the interview type videos, having these older Modern MBA styled videos once in a while is a good change of pace and keeps things fresh.
Maybe he’ll do a video on how his videos don’t make any money
Because too many "luxury" cars aren't luxury. Can we truly compare an A-Class to the S-Class or the 1 Series to the 7 Series?
I think you have confused a maker having only premium cars in thier selection.
A-class is the entry model for the maker but a premium for that small compact. Where the s-class is straight premium
I cant believe Modern MBA is telling me to put my money into some vaporware ev motorcycle company
yeah, electric motorcycles are looking really bad right now. anyone remotely interested in motorcycles knows that.
Also he is wrong about harley not having built an ev. A really bad look
@@harrystyles7466 Harley forgot about its core boomer customers with their EV bike. Was a flop on their part.
He's wrong too. Motorcycle brands HAVE innovated.. but consumers don't WANT innovation. They want classic motorcycles. If they cared about utility or fuel economy, they'd buy a scooter.
@@harrystyles7466same for cars, most ev start up’s fail miserably, the infrastructure isn’t even there for it to be mass adopted anyway, I don’t think the future of cars is electric but will be incredibly fuel efficient cars
@@poochyenarulez Ironic that in a video about luxury brands they don't recognize the fact that motorcycles are also a luxury. Nobody needs a motorcycle.
The VW group now has five tiers of premium. Skoda at the bottom, followed by Seat, Volkswagen, Audi, and Porsche. They also own Bentley, Lamborghini, Bugatti, and some amount of Rimac.
Additionally, your sponsor needs a fact check. Harley Davison has made the electric Livewire model.
Seat is no more, cupra took that spot
@@Flashv28Seat is a weird name in English speaking countries.
Is Skoda really at the bottom these days?
@@SweBeach2023it wasn't even number one under socialist Czechoslovakia
@@Flashv28 im still seeing brand new Seats. in fact, cupra is a type of Seat
Interestingly, the owners of luxury cars probably don't drive thrm that much.
I once worked for a major auto insurance company and everytime I pulled up a customer record were they owned a luxury car they always had at least one non luxury car like a Toyota. Often they had several regular cars and only one luxury car.
They’re just not good daily drivers
agreed I'd take my lexus any day over the Mercedes
Loved buying my insurance for my Porsche from a new insurance company that charged a low base plus each additional mile driven since didn’t drive it much.
That add for electric motorcycles crossed the line into lying. Harley has electric motorcycles. Electric vehicles aren't guaranteed to be the future.
They are, because fuel technology cannot be improved much more meanwhile electric vehicles are improving at fast pace. In less than 5 years they will have more performance and cost less. And in 50 years, electric vehicles will produce so much power that they could even fly(if that becomes legal in the future).
I love fuel vehicles but the technology for them is already fully developed, its not like we can make a 500hp car that sips fuel, meanwhile a 500hp electric vehicles that are cheap to run, already exist, like tesla model 3 performance
@@nocapproductions5471what is the logic behind continuous exponential or even continuous linear growth of electric vehicle performance? Just because something has an impressive trajectory of improvement during its infancy, doesn't mean that the growth can be maintained indefinitely.
@@nocapproductions5471Electric motors have been producing enough power for decades to create lift. It's the power source and charging that bottle neck electric cars. The materials required for batteries aswell. Battery technology is going to get more and more critical, yet the energy to weight ratio is still low.
@nocapproductions5471 batteries will never achieve the energy density of hydrocarbons. Charging speeds will never match liquid pumping speeds. Electric will always be less convenient than gasoline and convenience is king, because as the old adage goes, time is money. The only way electric outpaces ICE is through legislation. Natural adoption will never occur. Hybrids might be the future, but electric is unlikely to be.
They absolutely are yes.
3:35 One thing that this video leaves out. Porsche is the only maker on that regularly makes models that will make it past 100k Miles.
It's quite possible that a lot buyers don't really want a Purosangue. They want to be on the customer list so they can buy the next supercar so they can be on the loyal customer list so they can buy the next limited edition supercar.
quite the contrary, isnt very easy to get a purosange as a first time ferrari owner, just check the secondary markets..
Similar to Porsche asking customers to buy taycan, cayenne and other models, before being considered for a 911 GT3 RS order
No, people buy the purosangue when they ARE on the list, but really really want the f80 as soon as possible
People that try to impress Ferrari are plain idiots, I don't care how much richer they are than me, what they do is brainless
There are far more wealthy people who can afford basic Ferrari, Lamborghini and McLaren models even at 500k. The real game changers in the exotic space are the bespoke builders at ultra low volume: Pagani and Koenigsegg among few others. The luxury market is watered down with too many poorly built 500k cars that fall apart in a few years or less. This nuance of poor quality vs high performance was tolerated in the 70s, 80s and 90s when the wealth needed to afford even a Porsche was less present. Now your mom is driving a Porsche SUV and you can buy a used Maserati for 18k$.
In the pursuit for market share and volume the companies are treading a really fine line of profit vs exclusivity. At the end of the day most of them need to fail and rebuild as a new name multiple times to create the rarity needed.
The second biggest issue is driving feel. Electric engines, highly electric suspension and transmissions that shift perfectly sort of ruin the experience of owning and driving these cars. The companies that will exist in the future will ultimately reject most modern utilities and instead blend them delicately over the years. 0-60 in 2 seconds isn't special when a Tesla can do that. A manual transmission car that demands driver attention and restraint is truly exclusive.
Oh you mean Aston Martin charging $2million for a manual coupe v12.l.
Excellent breakdown 10/10
You don’t see many such maseratis driven though. Thats because they come with a 180k$ repair bill
That Damon ad was a bunch of malarkey. They look like every other motorcycle out there. “Innovation”, heh.
damon is gonna fail with a mission statement like that. The broad majority of motorcyclists like the no nonsense nature of older designs and the technology being put into them by tech companies like damon and zero is just shooting them in the foot.
Though even legacy companies can fail, just look at what's happening in Austria with KTM.
Also electric Harleys are a thing contrary to Modern MBAs statement
no one wanting to ride an ev bike is also contrary but its an ad read so its not like theres much to read into.
Im a vintage bike guy anyway my newest is a 99
if i was gonna go get one today...probably not gonna be a duroc i mean damon.
But old crotchy habits do constrain development of sales product...kinda . Motogp is still driving plenty of innovation at most companies.
Right. People who want innovation will get an ebike or a scooter. People buying motorcycles want something that looks and sounds vintage.
I own a HD Livewire one. It's a great commuter vehicle that costs me next to nothing to insure and operate. It's lightning quick.
Unlike jewelry, which has almost no practicality whatsoever, luxury vehicles happen to have "some" practicality due to their nature as a vehicle that could be used to travel from place to place. The introduction for this video gives me the impression that the topic isn't approached from the perspective of the would-be buyers, who are more likely to use the vehicles as a symbol of prestige, that they can not only afford the sticker price, but also the costs of maintaining the vehicle that it looks pristine in spite of the use.
From a mercantile perspective on luxury goods, the value of what you're selling is only as high as the value people are willing to pay for it, and the reputation of a manufacturer and its product are more important than the actual utility it provides. If you wish to see why people buy these products in spite of their practical drawbacks, you may want to do a deeper analysis of who buys these products, their demographic, and then ask them what each brand is associated with, and why- Some reasons to note are buying one to become closer to a fellow of the same demographic, the policies and past/recent history of the company, the appearance, and so on. Whether or not it's all practical is unlikely to be part of the consideration.
This 100%. Trying to analyze luxury cars through an automotive lens is a futile exercise. The best comparator is to put it up against luxury goods brands like LVMH, Rolex etc. and talk about what drives demand and price for these items.
@@zunaidparker They are not comparable to luxury goods like watches and handbags because all luxury cars depreciate whereas Hermes bags and Patek watches appreciate and are investments that deliver market exceeding returns in most cases. Luxury cars are simply very expensive consumption goods and status symbols.
@@sonnykoh3049 thats also not true because it really depends on which car you buy. Rare cars like high end 911s, limited Ferraris, Paganis etc have only risen in value many are now worth double of what they cost new, there is even a whole market of speculation around new releases, some even buy these cars soley as an investment. Cars like Panameras, Cayennes, Maserati were you have a big supply depreciate like shit.
This is probably the least researched episode on modern mba
Dude, you forget motorcycles is not only HD. Think Ducati, Honda, Yamaha, BMW. They certainly innovated over the years!
Kind of ironic to talk down luxury cars as impractical and pushing some random stock “Damon” that largely looks like a pump and dump.
It's an ad for motorcycles, not the stock.
@@a.k8069He mentioned they are publicly traded at the end of the ad
@@a.k8069it's an ad for the stock. They have never built a production motorcycle and don't have a factory. They IPO'd last month and the stock is down 80%. It's vaporware that took a bunch of venture capital and pre-orders and is now on its way out.
He do be having ads that are antithetical to the messages of his videos
What's with the ebonics?
Why luxury cars don't make money
Proceeds to put the single most profitable car brand in the front and center of the thumbnail
Seriously. It's a publicly traded company. Literally anyone can look up their financials and see the absurd profit margins and growth they've had.
the electric motorcycle company's copy is hilarious. walk into any motorcycle showroom and you can find find a high-spec bike with nearly every modern computerized and advanced materials feature you'll find on new cars. It seems like they're actually trying to appeal to potential new riders, which is a small segment with a lot of churn. I'm sure there is *a* market for electric sport bikes but it'll always be very small.
The only people who are even in the market for a bike in that price range are dentists and accountants going through a midlife crisis... It would probably work with that crord
Motorcycle market is already small.
Porsche also has the Macan EV.
Also, even though the Audi Q5 and Macan were to share a platform, Porsche needed to heavily modify the platform for the Macan-- they're pretty different.
At least that's what Porsche wants you to believe..
I have a macan turbo.... Nice vehicle with very few problems
A common mistake in the writing of these videos is mistaking singular and plural. It’s not “the number continue to grow” it’s “the number continues to grow”. It doesn’t matter if you put a plural word in between. It’s still “the number of cars continues to grow” as “continues” is connected to “the number” not “cars”.
Other thing about Ferrari and Porsche is their merchandising business. Ferrari has massive merch revenue and dedicated tifosi.
My big quibble is that the cars you're describing are labeled as "prestige" brands. Mercedes, BMW, Acura, so on are what's called luxury.
Yes. It irks me everytime he calls ferrari or lambo a luxury car
If you took any intro to accounting class, you learned the Seven Year Rule. For things like vehicles and furniture, it takes approximately seven years for depreciation to cut the value of the "asset" by 50%. Looking at something with a high price tag, like a luxury car, the absolute number is enough to be alarmed. But the maintenance costs will surely add to that enormous number. This is obviously a vast simplification, but it gives you a good enough idea.
God, just imagining myself as an accountant for those influencers who buy luxury vehicles makes me shudder.
the key is getting it to be used for business to get that sweet sweet bonus depreciation.
@@ceno10101 granted, I didn't take any classes on tax law when I did my business minor, but that sounds like a tax fraud case waiting to happen.
I doubt the rule of 7 years applies to cars. New cars lose value a lot faster, with 50% being reached in 2-4 years. And 10+ year old cars typically are ripe for export to the third world after another 7 years because they are too expensive to keep running in the western world.
For real luxury (and by that I do not mean Porsche Cayennes selling in the thousands each month), depreciation is a bit different anyway. For one, if production is intentionally limited, prices on the secondary market are often higher. And for two, people do not buy a Ferrari because it is cheap to run and comfortable to drive or buy a hand-made mechanical watch because it keeps time so well. People buy these things as status symbols, and high purchasing and/or running costs just make them even better suited to display status
@@foobar9220 of course. Hence why I said that I was oversimplifying. The 7 year rule applies to idle items. It does not account for wear and tear, maintenance costs, and of course any kind of brand risk factors, such as the brand image of the luxury car.
I would estimate the 50% mark to be reached at 3-4 years today, and with rising fuel costs, this period will likely shrink as the costs of ownership increase.
This feels like it could be a fun monte carlo simulation.
nothing wrong with them spending their money on a cool car if that's what they want to do.
Why use the word luxury when you already know the proper term is exotic? Lamborghini, Ferrari, or Porsche are NOT luxury car brands. These guys make performance sports cars, the best in the world. Sure they each have a luxury model but the entire lineage, history and the aggregate of their vehicles are performance sports cars! That is a massive difference when it comes to their clientele and and their use cases. Luxury car brands would be Audi/Mercedes/Lexus/Infiniti/AstonMartin/Bently/Rolls Royce/ etc. Porsche for example is one of the only car brands whose cars appreciate. There is a reason for that and it sure as heck isn't luxury!
Only a very very small percentage of Porches sold appreciate...
it's really crazy how nobody is talking about the book the elite society's money manifestation
Doing a DTC motorcycle company is an interesting move.
I really don't think people are going to be willing to pay Goldwing money for a 150 mile range ebike though.
There's a difference between a "luxury car" and an "exotic car". The former is GUARANTEED to depreciate in value, while the latter often times do become appreciating assets due to their rarity & exclusivity.
A Gallardo, MC20, SF90 etc are all exotics and have massively depreciated over time
The price depreciating curve only ends if the vehicle becomes a classic, noteworthy or even determined by people to be cool. Such as early vehicles like any Old Ford Model T or the derivatives since the historical nature of it, classic mustang or lets say even the First few Hummers. There will be a market of people willing to buy them depending on the quality
Forgot to add the DeLorean as from what I have seen some car collectors do want it as a visual piece.
the porsche LBO attempt in 2006-08 was fucking crazy
A quick note, the Cayman didn't come out until 2006. While the Cayman and the Boxter are based on the same platform, one is a coupe and the other is a convertible, the two cars were released a decade apart.
You keep pushing out great content man, keep it up
the worst ad intrgration and reads but great facts driven content! So hey, someone has to pay for it.
Maserati is notoriously unreliable garbage 😂😂😂
At the moment, Ferrari is even the most valuable car company in Europe. It is just in another league compared to all the other low volume, ultra luxury car companies
Yeah, Ferrari meantained the brand purity, meanwhile Lambo mass produced Uruses and Huracans which diluted the luxury perception.
12:00 The platform is shared, but the audi R8 came out later. they did not have a shared launch and they at first were more different from eachother, slowly merging near the end of both their 1st generations.
“Luxury SUVs” is the most obnoxious oxymoron ever coined. Either choose to drive a luxury car or an SUV.
do a video about TCGs
It's gotta be a blow to the entire premise of these vehicles when they can barely overtake an electric family crossover on the track. They trade so much for performance that's not only useless the majority of the time, it's not even relatively impressive anymore.
I would say in general the influencer culture has ruined the "luxury" industry across the board. When you see these low class unaccomplished people having the expensive stuff you really don't want to be associated with people like this. More importantly these bottom feeders have increased demand making luxury stuff more expensive for the people it was originally intended for. I see that watches and collector car prices are starting to go down which is the correct direction.
Porsche is not a luxury brand. It is a premium brand like mercedes and bmw. They do have very expensive cars in the 200K range but those are outliers. I think it is insane how a G wagen goes down $10K a year in value like clockwork
Aston and Maserati are garbage cars. I would be more inclined to call them luxury because you have to truly be rich to eat that depreciation.
Ferrari is not independent. They are owned by Fiat. I am wondering what happens when all cars have to be electric. Enzo Ferrari said you are buying the engine not the car. Now there is not going to be an engine who knows how ferrari will do. Of course there are always going to be poseurs who want anything expensive but how about the purists and actual enthusiasts?
if by garbage you mean in terms of reliability then you must also add ferrari in that list, and also, the type of people who can afford an aston/ferrari really dont give a crap about that since they also have a secondary car used as a daily driver, and besides, in terms of looks, luxury and performance in terms of price range, nothing beats aston/ferrari/mclaren
Ferrari have nothing to do with Fiat. The only link would be Agnelli. Owners: Exor N.V. (24.65%); Piero Ferrari (10.48%); BlackRock, Inc. (6.07%); Public (58.8%)
Aston Martin and Maserati garbage cars!?! Be sensible. Their depreciation is still better than on mainstream mass market brands at that price point.
Porsche is pretty luxury dude, they have cars costing several hundred thousand dollars plus many sell at huge premiums (RS models for example).
Porsche already have the all electric Taycan and are releasing the Boxster Cayman replacement that will be electric only. Most enthusiasts are not that bothered about acceleration but more about handling, steering. styling etc. There are cars such as the ionic N that bridge the gap between electric and what enthusiasts enjoy with simulated gearing etc.
If Enzo was still alive Ferrari would have gone bankrupt because he doesn't care about reliability or innovation if that's what you are trying to say. The hate towards the new f80 divided people that know Ferrari Vs people that think they know Ferrari. The company has always been racing. Enzo started the company just to fund his racing career. V6 is part of Ferrari history. People buy Ferrari because it's red. Second reason is the performance and lastly the engine
Problem is that catering to car enthusiast is not sustainable as a business because they already have cars.
Luxury cars do make money. It's just a point of the business cycle where there is a period every car company bleeds let it be minor or major.
Have a look on the Ferrari balance sheet and Porsche annual report then you'll know the reality
I remember when the Cayenne came out a lot of purists mock it including Ferrari and Lamborghini fans. But after seeing the success of the Cayenne and Macan. They have now their own SUV/Crossover. I am waiting for Mclaren to soon follow.
Its perplexing to me how valuable ferrari is on the market, by far the most valuable italian company.
Despite barely making any money compared to every other car company.
18:50 "ferraru" at the bottom right instead of ferrari.
Is that why we never got the Tesla Roadster 2nd Gen?
There is no market for Maserati or jaguar. To much competition and quality control issues.
You might want to do a video on motorcycles of you think electric is the future of that industry.
17:36 Ferrari is owned by Exor which owns Stellantis, it’s not independent.
It was spun into an independent company called RACE with exor having the control and voting rights the rest is owned by the investing public, Piero Ferrari and Blackrock.
10:30 HD makes electric motorcycles too. The Livewire one and Del Mar.
One thing I’d like to note is that the Audi R8 was actually based on the Gallardo, not the other way around. The engine is thoroughly Audi, though “reworked” by Lamborghini. The chassis and refinement is more or less all Lambo. It’s a small, but important distinction
I love how there's no deep analysis for Ferrari, they have mid 20% margins because they're Ferrari and that's what the people want 😅
The main difference between exotic cars and other luxury items is that the cost can be justified by the low volume not making up the R&D costs. I guess you can make the argument for a lot of the SUVs exotic brands are putting out since most are rebadges, but I strongly disagree that they lack innovation. High R&D costs and lack of economies of scale are what kill most of the other brands. Ferrari and Porsche are the exceptions. Ferrari has such a strong brand that they can essentially price any way they want. Porsche has the mainstream SUVs that offset a lot of R&D costs for their sports cars (part sharing between the 911 and 718 lineup does help a lot though). Both charge a ridiculous amount for options since they have the brand recognition and demand for customers to be willing to pay as mentioned.
Even for large automakers, they're reluctant to make sports cars, because they lack economies of scale to justify their development costs. Also, car enthusiasts are a very picky bunch, so it's mostly the ones that are well engineered with a cult following or those that share parts with conventional cars that tend to survive.
Ferrari is the one true king of the luxury auto world! Independent, well funded and developed, pristine history, ultimate brand prestige anywhere in the world most importantly they made and STILL make the best supercars!
0:56 the reason people buy these cars is not for trunk space, they purchase because of the driving experience. When you learn how to drive speed bumps and low visibility issues become a small con to a greater drive. Buying the right exotic car at the right time will be less expensive than a luxury car.
Buy a Porsche 911(any model) vs S Class(not amg) the 911 will retain more value each year than the S Class. Furthermore, buy a Mercedes SUV(not a G Wagon) and you’ll see depreciation like an anchor in water
what are you talking about/referring to when saying platforms?
Great episode. Thank you.
As someone who has finally reached a place in life that I can purchase a vehicle around 350k cash. I refuse to even though I thought I have wanted one my whole life. I’d rather spend that money buying my freedom from the daily grind that has gotten me here in the first place.
another excellent analysis, but I would be more careful with choosing sponsor, don't want to tarnish your hard earned reputations
Nice video, lots of useful stats. It would be nice to make the content a bit less dense though. I had to pause every few seconds to study the charts, which is a bit inconvenient over a simple morning breakfast.
I always thought that as most of them are either owned by a major car company or are an engineering exercise (see pagani, czinger, koiniggsegg etc) they exist either to be a test platform, and engineering exercise or an advertisement for a companies capabilities
What do you mean by engineering exercise
You forgot to mention the F1 angle on public perception. Is that intentional?
Love the videos 💯
"where speed limits and traffic prevent these cars from ever achieving the performance that makes them so special"
Marques Brownlee: 👀
Very good video, great job.
I was expecting the un-expectation that ModernMBA will interview both Tyler Hoovie and Car Wizard about their resale value, repairs, insurances and engineered corner cutting of parts. But great video nonetheless.
Lmaooo what did international students do to you?
Is it just me or is the audio a bit off? It sounds like he's really soft but when his voice rises and it happens sharply and hurts.
if you want the loudest and most impractical Porsche, it's the boxster spyder RS.
That ad is silly - a quick Google search shows that Harley Davidson has three electric models currently for sale featured on their website. Also, a lot of the focus here is on exotics rather than luxury cars. I suppose you could term all of these as "luxury items", so the label fits, but not perfectly, as prominent firms like Mercedes are left out, as well as luxury lines of the big auto manufacturers. The conclusion reached here is true for exotics, but may not be true across the board for luxury cars, e.g. I would not show production and financials of Lamborghini as a comparable case to an established auto maker looking to start a a first or additional luxury line - I'd show them Lexus. If someone wants to start a company selling low volume high cost vehicles, then exotics firms would be relevant.
Porsche and Ferrari seemto be doing pretty good as businesses.
Who makes all the parts? Can I buy shares in them…?
The performance is laughable for the price. The C8 Corvette or a Tesla Model S can put many to shame.
New mic??
"unparalleled safety" while showing a guy doing a wheely lol
Most recently, Aston Martin has been bought by Laurence Stroll in order to keep his son in F1.
I’m not sure what he meant by the title but most luxury cars literally have massive profit margins, and as an example Ferrari and Porsche make the most profit per car of any other manufacturer
I like how you quoted the two car brands that he literally called the "exceptions" to the rule.
@ well if you want more examples I could give you about 10 different manufacturers
@ikhoonyejelem2967 give. give me 10 examples of ultra massively profitable luxury car manufacturers. let's see what you got
Great video
"and international students"😂 accurate.
The necessary things make life bearable, while the unnecessary ones make it beautiful.
Am I the only one who saw about 5 Google ads during this video? 😮
WTF?
Although you make a good amount of valid points, you’re still a lot that you have either missed interpreted or just don’t understand. A lot of brands are just woefully mismanaged like McLaren in Aston Martin they do need backing, but they also need the proper management to know how to market service and govern into the future effectively. As you’ve demonstrated in your own grass, Bentley is doing well, but again it is at a price point similar to Rolls-Royce. It’s not meant to be growth. Also, you’re biased due to your sponsorship needs to be noted because like the best majority of EV start ups, they have a huge mountain to climb. The future is an all electric. It’s an option, but it’s no longer the only viable way forward because it cost so much more to make an EV and the residual holding values think harder than a lot of exotic cars as well.
This video is clearly made by somebody who’s not into cars at all. I know many people who owns these cars. They easily are able to use these performance on the streets.
100% Was just going to comment the same thing
bullshit. if you think accelerating in a straight line on a highway is "using the performance" ur an idiot. actually, youre already an idiot for that comment
legally?
@@poochyenarulez no, but most car enthusiasts do it, find back roads to drive spirited on, or doing donuts at some abandoned warehouse, even just doing a pull on to a highway
@@BMWROYAL lmao ur thinking going fast in a straight line is "using the performance"
Tell that to Porsche. They’re doing alright. 🤷🏻♂️
you didn't watch the video lol
I'm not buying a techbro motorcycle. They aren't disrupting anything.
Complete waste of money even if you are rich
If you buy pre owned it makes sense.
Do a study case on evtol
Funny how a Hyundai ioniq that costs $45k new has a battery that's equal to it's purchase price and you're paying that out of warranty 😅😅
Porsche is alive simply because of the Cayenne and boxster nowadays.the cayenne was built on the vw tourag
You only live once, if you can afford your dream car.... get one.
Cars are a major consumer item.
Porsche isn’t exotic, they are my daily
I love hearing that oil tycoons and petro sultans are buying up luxury car brands because they're so out of touch with the rest of the world and are losing money over it 😂
It's almost like.. Porsche wants you to never forget 9/11
Is that car really named "nine eleven"?
They should sell it over in Pakistan and it's gonna be a hit!
TLDR this is just a ad for a motorcycle company making shit bikes nobody wants. 🤡🤡🤡
This is an ad for damon
fanboys are the greatest undoing of the automotive industry
The only correlation to overall profitability is to have a horse in your logo, this should be known by now.
can you do artisan chocolate next ?
I need to buy a Lamborghini
Step one, get a job
@rsac43 I already have a Jaguar F-type R convertible (incredibly awesome car) and a new Porsche macan turbo. Paid cash for both. Next year getting an Aventador and gonna pay cash for that as well.