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Saturday, September 22, 2007
Most Coveted Cars
The Bugatti Veyron supercar can go from zero to 60 in less than 2.5 seconds and reach a top speed of 253 miles per hour. And by most accounts it ranks as the world's most expensive production vehicle.

But with a planned worldwide run of 300, even the most deep-pocketed will not likely see one, ever. That's because, in addition to dropping $1.4 million, buyers will have to wait in line about 10 months for the 80 to 90 models rolling off the assembly line this year.

That's nothing compared to the Koenigsegg CCX. The all-new, exotic Swedish supercar performs like the Bugatti, at about half the price. Yet with less than 20 cars available annually in the U.S., some say it's destined to be more coveted because it's within reach of a much larger pool of the rich and famous.


Ben Nef, who sells the CCX at its sole U.S. dealership, Exotic Cars at Caesars Palace in Las Vegas, says that as soon as the first deliveries begin this month and later hit the road, the waiting list--now at just over a year--may double.

That makes sense, according to Milton Pedraza, CEO of the Luxury Institute, a market research firm. He says people who can afford the most exclusive cars see them as status symbols. Such cars earn them a rank with oil sheiks, tech moguls and captains of industry, or at the very least allows them to be regarded as a mover and shaker in their own city.

"These cars exert influence … they say who you are in the hierarchy and can be a power base for business deals," says Pedraza. "And how long you've been on the waiting list for a particular vehicle says how long you've been a power broker."



Car Cliques

Quite simply, the more exclusive a vehicle, the more likely it is to be coveted by those who can afford it. Lack of supply builds demand, yet these automakers don't increase supply because they see the long-term value for their brands in exclusivity.

But striking that delicate balance can be challenging for automakers. Stoking demand with truly special products and producing enough cars to turn a profit, yet holding back enough so that not everyone who wants and can afford one can get it, is behind what makes brands like Ferrari so successful.

For years, Ferrari has masterfully managed its waiting lists, always making sure demand exceeds supply, and Ferrari ownership is something that is sought out by those with the means. There's now a typical wait time of two years on any of its models, and the company and its dealers follow a centralized system in which repeat customers are placed higher on the waiting list. Other companies that use a similar system in the U.S. include Aston Martin and Bentley.

In general, the most successful prestige luxury and sports car makes are those that aren't going to compromise the exclusivity of the brand to appease newcomers, adds Pedraza. They include Lamborghini, Rolls-Royce and Bentley.

Bob Cann, who has sold exotic sports cars and prestige luxury cars for 30 years through his MotorCars International and Lamborghini Houston dealerships, compares these most coveted cars to high-end real estate, where location is everything.

"Lamborghini and Ferrari have found that if they build cars in a limited number," he says, "it really drives the market, and price almost becomes secondary to other factors like 'How soon can I get it?' or 'How many are there?'"

But also among the most in-demand are models from several larger automakers that manage to stay highly regarded by the elite crowd by making image-building, limited-volume cars.

In these cases, the rules for waiting may allow a bit more line-jumping, depending on who you are. Mercedes-Benz, for instance, sells some pretty exclusive, distinctive models under its AMG line. But, like most full-line automakers, Mercedes leaves it up to its dealerships to divvy up those precious slots on the waiting list for even the rarest models.

"We trust our dealerships to treat our customers well," says Larkin Hill, a spokesman for Mercedes-Benz. Hill says if dealerships want to grant preference to loyal longtime customers, that's fine. "It allows the dealership to reward their best customers," he says.

Priority status is another solution employed by some of the industry's smaller automakers to help spur positive cash flow. For instance, Silicon Valley's Tesla Motors has a two-tiered reservation system. A a deposit of $30,000 merely puts you on the list, while a larger deposit of $50,000 allows you rush status and delivery a few months earlier.

Source : Yahoo

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