Luxury on the rebound

Battered and bruised, the luxury-goods market--including luxury automobiles--is steadily recovering and developing strategies to avoid the wrath of future recessions.

JWT Intelligence, a marketing communications brand that focuses on global trends, and Milton Pedraza, founder and CEO of the Luxury Institute, recently discussed changing luxury trends. During their Q & A, Pedraza said, “Luxury brands have a very long way to go, and they know it. . . . There is not one major luxury brand that is not thinking about how it transforms its culture into a more customer-centric approach to increase sales and profits. There’s a lot of humility now.”

In the same interview, Pedraza said luxury buyers are looking for technology products and any item that delivers an experiential component.

Like other luxury products, high-end automobiles have experienced a significant gain in recent months. Danielle Russell, Google’s head of automotive for the Midwest region, noted that the luxury-auto market was up 35 percent this August when compared with August 2010 figures. Part of the gain might be attributed to luxury-car manufacturers that have heightened their attention to both in-car technology and the experience their buyers have before and after they purchase a car.

“Over 80 percent of luxury auto shoppers rank in-vehicle technology a top priority when making a purchase," Russel explained. “And it’s not just about the ride – consumers value the personal interaction as well. Salespeople impact a luxury shopper’s purchase nearly twice as much as they influence a general auto shopper."

One of the best examples of an automaker incorporating both enhanced technology and a unique experience comes from Hyundai. With the launch of the Hyundai Equus for the 2011 model year, Hyundai aimed to provide more than its competitors (the Mercedes-Benz S-class, the BMW 7-series and the Lexus LS) at a significantly lower price. On the technology front, Hyundai focused on improving ease of use with navigation and other features available on the eight-inch digital screen and meeting or exceeding the competition on the performance and safety engineering fronts. With a price tag at least $20,000 less than that of the majority of the competition, Hyundai hits on another trend luxury consumers are newly realizing--the importance of value.

To help create a luxurious experience, Hyundai starts by delivering the Equus to your location when you’re ready for a test drive. An iPad app is available for scheduling regular maintenance and, so as not to waste customers' time, the Equus will be picked up, a replacement vehicle will be provided and your own car will be delivered back to you once the maintenance is complete.

BMW offers customers the option to take delivery of a new BMW in Germany as soon as it rolls off the line. The trip is included in the purchase of the car and even reduces the U.S. MSRP by up to 7 percent, says Monty Roberts, BMW's manager of product technology and motorsports communications in North America. BMW rolls out the red carpet for U.S. customers who opt for the experience with a tour of the BMW facilities, a drive along the autobahn, available driving adventure packages and luxury accomodations in some of Germany's finest hotels.

Lexus offers customers VIP parking and discounted event tickets, dining and amenity credits at select luxury hotels and a one-year complimentary membership to Andrew Harper's travel service, a private travel community offering members exclusive access to luxurious global destinations. For those who do not own a Lexus, a one-year membership to Andrew Harper's travel service would cost $195 to $350 depending on the level of service selected.

At least among luxury-car manufacturers, the days of taking consumers for granted and expecting extraordinary profits from subpar products appear to be over. Can we get a golf clap?