Why Luxury Car Brands Rarely Survive

Learn more about Damon Inc. at damon.com/
Owning an exotic car like a Lamborghini, Ferrari, or Porsche is impractical and has been for generations. The aggressive design and tight interiors translate to tiny storage with trunks that are even smaller than that of a Toyota Prius. Ironically, the engines are wasted on public roads where speed limits and traffic prevent these cars from ever achieving the performance that make them so special in the first place.
Yet these vehicles have become the ultimate status symbol for artists, athletes, international students, and clout-chasers - and that exclusivity is as much a liability as it is the foundation to their appeal. Luxury cars must be babied and cannot be daily drivers. There’s only so many people who have the pockets and the lifestyle to afford and work around this impracticality - and they're not buying a new car every year.
It’s a departure from the traditional auto industry where manufacturers compete to deliver the most cars. When we look at volume between bestsellers like the Ford F-150 and Tesla Model Y and exotics, the difference is orders of magnitude. How can these exotic manufacturers sustain such tiny volumes? How can they all survive fighting over the same pool of high-net-worth individuals? In this episode, we’re diving into the economics of luxury cars through the lens of Ferrari, Lamborghini, McLaren, Porsche, Aston Martin, Bentley, and Maserati.
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This KZbin video was conducted on behalf of Damon Inc. (NASDAQ: DMN) and was funded by Outside The Box Capital Inc. and/or affiliates after Modern MBA was engaged by Outside The Box Capital Inc. to advertise for Damon Inc. (NASDAQ: DMN).
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Learn more about Damon Inc. at damon.com/ 🎬 Support Modern MBA: buymeacoffee.com/modernmba ☕ Support Modern MBA on Patreon: patreon.com/modernmba 💬 Join Modern MBA on Reddit: www.reddit.com/r/modernmba/ 🌎 Follow Modern MBA on Facebook: facebook.com/profile.php?id=61570667949655 🕊 Follow Modern MBA on Twitter: x.com/modern_mba

[@little_finger]

actual good sponsor

[@windowwatcherproductions3383]

Harley is making an e-motorcycle dude

[@gotseoul123]

"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.

[@carinadominguez22]

You mean the Chinese students who are the children of CCP politicians.

[@johnl.7754]

Well for many of their fellow much much poorer countrymen it’s in a different universe that they live in

[@garak55]

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.

[@hathaway.1166]

rich parents, nothing more

[@josuad6890]

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.

[@iTzDritte]

😭😭😭 “The type of car you drive really doesn’t matter when everyone is stuck in bumper-to-bumper traffic” 😭😭😭

[@lil-data]

Unless it’s a Tesla with autopilot so you can chill

[@kingbonezai4925]

Well it is a MASSIVE difference if you are automatic vs standard Or self driving vs not self driving

[@anthologyofinterest1]

Bigger flex is not having to drive to work

[@samegoat8133]

​@@anthologyofinterest1being able to walk 5 minutes to work

[@DarrienGlasser]

That’s why I moved to NYC. Driving sucks and there’s no way around it other than avoiding it

[@Fhnsgkdfkvsgmvdg-y6u]

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.

[@Flashv28]

Seat is no more, cupra took that spot

[@Entertainment-]

@@Flashv28Seat is a weird name in English speaking countries.

[@SweBeach2023]

Is Skoda really at the bottom these days?

[@kenon6968]

​@@SweBeach2023it wasn't even number one under socialist Czechoslovakia

[@MGX93dot]

@@Flashv28 im still seeing brand new Seats. in fact, cupra is a type of Seat

[@Ironpancakemoose]

3:35 One thing that this video leaves out. Porsche is the only maker on that chart that regularly makes models that will make it past 100k Miles.

[@christopherbarber288]

yeah but who wants a high milage luxury car 😂 don’t really think it matters for exotics

[@ShepardofFire]

porsche might make more reliable cars but i feel like people who own other exotic cars just straight up will never drive them enough to reach 100k miles

[@ristekostadinov2820]

To be fair if we talk luxury cars and not fast sports cars Lexus are pretty well made.

[@hansm.picazo2550]

Because its one of the exotic cars worth buying

[@chumps7974]

That's good for resale and allows the non-wealthy can buy pre-owned Porsches

[@tjon901]

I cant believe Modern MBA is telling me to put my money into some vaporware ev motorcycle company

[@harrystyles7466]

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

[@AlGoYoSu]

​@@harrystyles7466 Harley forgot about its core boomer customers with their EV bike. Was a flop on their part.

[@poochyenarulez]

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.

[@Pringlebox]

@@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

[@mariusvanc]

@@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.

[@cdhilton7124]

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?

[@3_character_minimum]

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

[@Corvolet5]

I have a 1 series from 2020 and it's definitely no luxury car, lol. It's a premium car, but luxury? I'd say they are after 5 series

[@irdestroyer]

Merc, BMW, and Audi only produce "basic" luxury cars that are within the grasp of the middle class. They're everywhere.

[@andrewjpalla]

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 KZbin video creators.

[@genghiskhan6688]

sponsorblock is a must to watch anything on yt these days; dunno how can u do without it

[@superkas]

​@@genghiskhan6688 KZbin premium has neat features

[@AwesomeLifeguard]

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.

[@born_asleep]

@@AwesomeLifeguardBecause where is the money for youtube sponsors coming from? Come on man we all watch this channel, ask yourself the relevant questions.

[@jooot_6850]

@@genghiskhan6688skip button x12 true combo

[@duelme1234]

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.

[@TinRapper]

Maybe he’ll do a video on how his videos don’t make any money

[@nwomble6521]

That add for electric motorcycles crossed the line into lying. Harley has electric motorcycles. Electric vehicles aren't guaranteed to be the future.

[@nocapproductions5471]

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

[@Kuroiikawa]

​@@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.

[@Perikato]

​@@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.

[@michaeltorrisi7289]

​@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.

[@MrJakson112]

They absolutely are yes.

[@BlckJack123]

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.

[@alekkrstic]

They’re just not good daily drivers

[@bottim9728]

agreed I'd take my lexus any day over the Mercedes

[@johnl.7754]

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.

[@mihailhidler5400]

​@@bottim9728 Agreed because lexus is non luxury and mrrcedes is

[@lzh4950]

Probably to minimize depreciation as owners may sell them in the future for investment

[@CobaltLobster]

That motor cycle company is screwed.

[@hyenahallstrom7034]

Nobody wants all that useless tech on a bike so good riddance

[@mattcorley4622]

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.

[@rxklastz1770]

Oh you mean Aston Martin charging $2million for a manual coupe v12.l.

[@5un5hine73]

Excellent breakdown 10/10

[@kenos911]

You don’t see many such maseratis driven though. Thats because they come with a 180k$ repair bill

[@innotech]

GMA will always sell out its cars for this reason

[@Fhnsgkdfkvsgmvdg-y6u]

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.

[@Kownibal]

quite the contrary, isnt very easy to get a purosange as a first time ferrari owner, just check the secondary markets..

[@mrashid1995]

Similar to Porsche asking customers to buy taycan, cayenne and other models, before being considered for a 911 GT3 RS order

[@kenos911]

No, people buy the purosangue when they ARE on the list, but really really want the f80 as soon as possible

[@emil6568]

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

[@tooflyable]

How they convinced these same people to buy million dollar track-ONLY cars needs to be studied because they really won’t be driving them ever. Plus they could can’t sell them without ruining the relationship which doesn’t make sense how it’s an investment

[@Fabulist]

That Damon ad was a bunch of malarkey. They look like every other motorcycle out there. “Innovation”, heh.

[@Rainbow45s]

Why luxury cars don't make money Proceeds to put the single most profitable car brand in the front and center of the thumbnail

[@dudea3378]

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.

[@steingrenadier]

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.

[@zunaidparker]

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.

[@sonnykoh3049]

@@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.

[@gaba4563]

​@@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.

[@CountJeffula]

I mean, the consolidation mentioned here just goes to show that they basically are selling vaporware. It’s the same chassis and parts for the most part, but one is 10x more and perhaps 1.5x to 3x better performance with worse comfort.

[@juanritanjaya6254]

This is probably the least researched episode on modern mba

[@casualcadaver]

I don’t even think he can differentiate a luxury car to an exotic or sports car.

[@ExSheriffFattyBoySkinnyArms]

Agreed

[@Manowarmx3]

Dude, you forget motorcycles is not only HD. Think Ducati, Honda, Yamaha, BMW. They certainly innovated over the years!

[@log.c]

Suzuki, and Kawasaki. The Suzuki hayabusa is the fastest super bike ever. There are turbo busas with 900 hp. Those things can hit 60-130 in 2 seconds, with top speeds over 300 mph. It costs at most 70k to make a turbo busa.

[@gopher256]

Kind of ironic to talk down luxury cars as impractical and pushing some random stock “Damon” that largely looks like a pump and dump.

[@a.k8069]

It's an ad for motorcycles, not the stock.

[@AndrewJeffersonCotter]

@@a.k8069He mentioned they are publicly traded at the end of the ad

[@leathermanwave1]

​@@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.

[@born_asleep]

He do be having ads that are antithetical to the messages of his videos

[@gurriato]

What's with the ebonics?

[@Aimaiai]

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.

[@MrWhangdoodles]

Though even legacy companies can fail, just look at what's happening in Austria with KTM.

[@aquarocket8165]

Also electric Harleys are a thing contrary to Modern MBAs statement

[@Snocone333]

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.

[@poochyenarulez]

Right. People who want innovation will get an ebike or a scooter. People buying motorcycles want something that looks and sounds vintage.

[@dannydaw59]

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.

[@Royaleoake]

I’m a car person and even I cannot see the difference between an ‘entry level’ Corolla and a Mercedes these days. They both have automatic systems and leather seats, yet the Mercedes costs so much more. For what? German engineering? lol 😂

[@SPMinerva]

Other thing about Ferrari and Porsche is their merchandising business. Ferrari has massive merch revenue and dedicated tifosi.

[@yay842]

Funny way of spelling regarded meat riders

[@Shawnjohson1608]

There is no market for Maserati or jaguar. To much competition and quality control issues.

[@Tarkov.]

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.

[@Cooe.]

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.

[@andrettransformer]

A Gallardo, MC20, SF90 etc are all exotics and have massively depreciated over time

[@chumps7974]

​@andrettransformer they have the potential to go up in value after they hit their max depreciation

[@polynices2461]

@@andrettransformer I don't think he's talking about anything made after 2000, classics go up and up if kept in good condition.

[@hadrian2505]

You'll never be as disappointed as the day you buy your first supercar

[@AvocadoAtrocity]

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.

[@Flashv28]

At least that's what Porsche wants you to believe..

[@bestprice1776]

I have a macan turbo.... Nice vehicle with very few problems

[@SeekoGT]

So Daemon came to you guys like “here’s what your next video is about and here’s how we’re gonna spin it.”

[@me0101001000]

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.

[@ceno10101]

the key is getting it to be used for business to get that sweet sweet bonus depreciation.

[@me0101001000]

@@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.

[@foobar9220]

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

[@me0101001000]

@@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.

[@bleuebloom]

nothing wrong with them spending their money on a cool car if that's what they want to do.

[@ariadne6955]

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.

[@kenon6968]

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

[@favourmiracle7094]

Motorcycle market is already small.

[@ToddBeck]

"It's clear the future is in electricity, not gas." Really? How far out is that ROI?

[@ZimbolicalMayhem]

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.

[@a2515]

the porsche LBO attempt in 2006-08 was fucking crazy

[@BartRovers_]

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”.

[@ExSheriffFattyBoySkinnyArms]

I know. English is a very easy language to learn compared to French or Dutch and anglophones have this uncanny ability to butcher English on a regular basis. How??

[@colemc18]

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.

[@R1111-z4w]

Yes. It irks me everytime he calls ferrari or lambo a luxury car

[@shortysmall]

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.

[@LaHaine-l5q]

it's really crazy how nobody is talking about the book the elite society's money manifestation

[@blargster]

I'm not buying a techbro motorcycle. They aren't disrupting anything.

[@Comm0ut]

Their customers (celebrities, drug dealers etc) will buy them for clout. Buyers are rarely coldly rational people.

[@Marbeary]

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.

[@AvocadoAtrocity]

Maserati is notoriously unreliable garbage 😂😂😂

[@ReadWithPriya]

These businesses are best observed rather than owned! 😅

[@hyenahallstrom7034]

TLDR this is just a ad for a motorcycle company making shit bikes nobody wants. 🤡🤡🤡

[@RS-xx9ve]

Main problem is, until not that long ago, you could keep a prestige forever. Nowadays, a prestige car becomes undriveable, unrepairable after as little as FIVE years. That doesn't meet the SENSIBLE definition of a prestige car. It's all down to too small overtuned engines and masses of cheap components. And most importantly, FAR TOO MUCH cheap, unfixable electronics. People with brains are voting with their feet. They are seeing that "prestige cars" are now the Emperor's New Clothes. And instead of respecting the customer, manufacturers are trying to take the p155 out of them.

[@rachel_sj]

“Luxury SUVs” is the most obnoxious oxymoron ever coined. Either choose to drive a luxury car or an SUV.

[@ewenewen4060]

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

[@nocapproductions5471]

Yeah, Ferrari meantained the brand purity, meanwhile Lambo mass produced Uruses and Huracans which diluted the luxury perception.

[@xrkuzd1569]

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!

[@rsac43]

Only a very very small percentage of Porches sold appreciate...

[@lwdn3379]

You may as well lump Porsche into the luxury segment, they are not an exotic car. The only car that could maybe get close to that would be the 911, and even then, you're talking about 2-3 models (GT3/RS, GT2/RS,GT4/RS).

[@Spherz]

Sultan of Brunei would like a word with this video’s title

[@kangamagic1206]

"The future of vehicles is electric". Hard to defend that statement when EVs lose EVERY manufacturer money, when sales are bolstered only by heavy-handed communistic intervention into the markets by government, and when the resale value of electric vehicles is in the toilet for several reasons. Fun fact: electric vehicles require so many CO2 emissions to be produced that they need to be driven 7 years before they have emitted less overall CO2 emissions than ICE vehicles.

[@teakcore5261]

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!

[@Orcawhale1]

This video was so clearly not done by a car guy.

[@georgegaubi3232]

Yeah by a financial expert, you know the kind that actually controls car makers

[@Orcawhale1]

@@georgegaubi3232 That's now how the exotic car market works, no.

[@georgegaubi3232]

@@Orcawhale1 VW, Porsche, Ferrari etc. practically all of these companies are publicly traded meaning they are owned by investors- primarily funds, banks and other financial institutions

[@Orcawhale1]

@@georgegaubi3232 Yes, but that don't mean they are "controlled" by them. It's stil the maker and the market, that determines what gets made.

[@georgegaubi3232]

@@Orcawhale1 Youre just twisting semantics. The market only makes demands, it is up to the board of directors and their appointed ceo to make executive decisions. Maybe read up on how buisnesses actually work

[@Taqawt]

every time i hear someone describe an up-and-coming company as looking to "disrupt" anything, i know i'm listening to a sales pitch for garbage. the worst buzzword in the business world.

[@docchung9085]

You might want to do a video on motorcycles of you think electric is the future of that industry.

[@Poorgeniu5]

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.

[@minusCEE]

Easy, get supercar killers, get GTR. Sadly they don't have the car anymore

[@revanthmunnangi5319]

do a video about TCGs

[@kapilchhabria1727]

To be honest, the flex these days is not exotic cars as much as it is racing bicycles. It’s an expensive hobby that lets you geeenwash your itherwise terrible lifestyle.

[@rem_tube]

You keep pushing out great content man, keep it up

[@Snocone333]

the worst ad intrgration and reads but great facts driven content! So hey, someone has to pay for it.

[@CEO_Youtube.]

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

[@apileofrocks5142]

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.

[@gabrielalves6508]

This channel makes us feel like every type of business is a bad business.

[@EnthusiastAutoClub]

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

[@allenmontrasio8962]

Porsche and Ferrari seemto be doing pretty good as businesses.

[@Entertainment-]

Is that why we never got the Tesla Roadster 2nd Gen?

[@djchrisroxx]

Definitely makes bumper to bumper traffic better when you’re in an amazing car.

[@shoopitor3796]

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

[@sonydominates]

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.

[@loC2ol]

Get your bag bro. But people are gonna seriously stop taking you seriously if you keep promoting pump and dump bullshit

[@petetroglodyte1860]

lol. That was a cute ad for electric motorcycle.

[@GradythaStudips]

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.

[@serioserkanalname499]

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.

[@iymenabdella1774]

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 😅

[@CoolHand273]

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?

[@NotAP05]

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

[@jonathanbowen3640]

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.

[@favourmiracle7094]

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

[@favourmiracle7094]

Problem is that catering to car enthusiast is not sustainable as a business because they already have cars.

[@REgamesplayer]

Porsche is definitely a luxury brand. It lowest models rub shoulders with premium brands, but its pricing and everything else is of low end luxury brand. Some models do cost quite a bit. They also deliver superb levels of performance and you really need to go way up in price to beat them.

[@ShivangAgrawal12]

You forgot to mention the F1 angle on public perception. Is that intentional?

[@haydenho154]

he's probably just a numbers guy who can't do much other then read graphs and market trends

[@brianmcisaac]

Every kid dreams of owning an electric motorcycle. That's why they're flying out of the showrooms.

[@timofeisednev45]

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.

[@innotech]

Porsche is like "I aint heard no bell"

[@jealva]

Not to be a stickler but Ferrari hasn’t made a 488 for years. The MSRP is wrong as well.

[@XennialGuy]

0:44 Where were these inaccurate numbers pulled from? $395k msrp for a 570S? $526k for a 488? What??

[@kaushikrj5909]

9:24 lol the little hole with a string

[@stevenwoerpel1884]

Luxury cars do sometimes increase in value. I have an uncle that bought a boxster in 1999 and sold it for double a couple years ago. Not as good as the market over that time period but he didnt lose money like you would with almost any other car.

[@zsigmondmarias7318]

The necessary things make life bearable, while the unnecessary ones make it beautiful.

[@GyroCannon]

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 😂

[@FebreGundam]

"where speed limits and traffic prevent these cars from ever achieving the performance that makes them so special" Marques Brownlee: 👀

[@matthewcahill4475]

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

[@luanzondervan7402]

What do you mean by engineering exercise

[@موسى_7]

​@@luanzondervan7402Training the engineers

[@emekaasiegbu3697]

This video title is what I have been saying for months and everyone has been calling me crazy😂this needs more views

[@JonahTheMans]

The only correlation to overall profitability is to have a horse in your logo, this should be known by now.

[@erinh9660]

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.

[@enricodm]

17:36 Ferrari is owned by Exor which owns Stellantis, it’s not independent.

[@Gerdnantes5507]

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.

[@nlpnt]

Ferrari's secret is that they're *semi*-independent. They were spun off of (then) FCA years ago but retain a connection through the Agnelli family which is why they still use the latest version of Uconnect among other things. They're independent unless they need a major automaker's resources in which case they have connections (yeah, with Stellantis, but still...)

[@jasonj8246]

can you do artisan chocolate next ?

[@landonkirk5444]

"unparalleled safety" while showing a guy doing a wheely lol

[@honichi1]

the problem with luxury cars is that actually rich people dont need high performance cars, no matter how much they cost they drive in maybachs with a chauffeur "luxury" cars are enthusiast models, people that have an interest in driving expensive cars

[@timergooff]

another excellent analysis, but I would be more careful with choosing sponsor, don't want to tarnish your hard earned reputations

[@youtubeus3rname]

Great episode. Thank you.

[@SmashGhost]

There are so many mistakes in here WRT Porsche/VW platform sharing and the Porsche survival and failed attempt to take over VW. Normally this channel gets so much right, but this video isn't as thoroughly researched as usual

[@qx4n9e1xp]

Thank you, Damon, for making cool motorcycles & sponsoring this interesting MBA video. But no, the future is not electric. I'll still take my gas vehicles, cars, trucks, AND bikes (and boats and planes etc.) until the technology is actually better for range, cost of repair, & charging ease.

[@20teamplayer]

The performance is laughable for the price. The C8 Corvette or a Tesla Model S can put many to shame.

[@Afterglow.Studios]

Awww I woulda bought you all a Porsche 911 if you had used the clip of Lois saying “9/11” for the 911 segment. Oh well 🚘