Rolls Royce and Porsche, two luxury car makers, ended 2018 with record car sales. Meanwhile, the rest of the world seems to have stopped buying cars. What does this say about world inequality?
The Jalopy Driver
In the U.K. last year, new car registrations fell at their fastest annual rate since the recession in 2008. The Society of Motor Manufacturers and Traders put this down to a trio of factors: Brexit, new emissions tests required by authorities and the falling popularity of diesel. The sale of diesel cars was down 30 percent, while total new car sales fell by 6.8 percent. The biggest losers were some of the most utilitarian: Fiat, Smart and Nissan.
Similar scenes throughout Europe show that it was not just Brexit to blame for a poor 2018. Sales in Germany – Europe’s biggest economy – were down 0.2 percent and vehicle registrations fell 6.7 percent in December alone. Peugeot, Nissan, Renault, Ford and Volkswagen were among the biggest fallers.
In France, the yellow vest (gilet jaunes) protesters were blamed for a 15 percent fall in new car registrations in December. Though the total market in France rose by 3 percent in 2018, the industry group CCFA is expecting it to reverse in 2019.
Burned cars are pictured near avenue Champs-Elysees after protesters from the yellow vest (gilets jaunes) protesters. These protests are believed to have dented car sales in France. (Mustafa Yalcin/Anadolu Agency/Getty Images)Getty
Beyond Europe, China is seeing its first annual fall in new car sales in 20 years. Sales fell 6 percent in 2018, according to the China Passenger Car Association (CPCA). The blame has largely been pinned on the end of subsidies for buying new cars, but trade tariffs with the US were also accountable.
The Super-Car Driver
Look closely at the figures, however, and not all car sales were gloomy in 2018. In fact, some celebrated record years.
Rolls Royce has sold more than cars than ever in its 115-year history. The BMW-owned and British made luxury brand saw sales rise 22 percent in 2018. All major markets were buoyed but particular highlights were the U.S. where tax-breaks helped exports. Cars to China rose by 40 percent and even sales in the U.K. were up.
The new Rolls Royce Phantom 8 has helped sales at Rolls Royce rise to their highest in 115 years. (Martyn Lucy/Getty Images)Getty
Two other luxury car-makers celebrated record sales. Another U.K. brand, MacLaren, recorded a 49.3 percent increase over 2017 figures, completing eight consecutive years of growth. In China, sales were up 122.5 percent.
Audi owned Porsche also had a record year with sales up 4 percent in 2018 while Jaguar and Mercedes both had bumper 2018s. HR Owen, the world’s largest dealer in Ferrari, Lamborghini and Bentley cars, doubled its profits according to its last accounts in April 2018.
H.R.Owen in central London where sales of luxury cars are booming (Photo by In Pictures Ltd./Corbis via Getty Images)Getty
What Car Sales Says About Equality?
Car sales are a fickle bellwether for equality or even economy. As car-makers note, political and practical forces like Brexit and diesel emissions can deter people from buying new models.
That the wealthiest are not deterred, however, either says something about their optimism in the face of economic uncertainty or something about their income in relation to everybody else’s.
This week Oxfam released figures that show billionaires’ wealth increased by 12 percent in 2018 while the poorest half of the world’s population saw theirs fall by 11 percent. The British charity calls on the richest 1 percent to pay an extra 0.5 percent to help combat inequality.
Studies also show that the poorest households spend around a quarter of their income on their car versus about 12 percent for the wealthiest. For billionaires its even less. If inequality rises those figures will become even more stark, especially if new car prices rise faster than average wage growth, as they have been in many countries.
Meanwhile, the latest, smartest and fastest luxury cars are flying off the proverbial shelves. If inequality rises much further they may be the only cars on the road.