LONDON – It’s no secret that many purveyors of luxury goods and services have simply written off the whole of 2009, setting their sights on 2010. Moreover, it is generally understood that when recovery does indeed set in, the luxury industry is highly unlikely to see sustained growth of the magnitude experienced over the past fifteen years.
The luxury car sector certainly hasn’t been spared any pain during this downturn. The global automobile industry has been ravaged by a dramatic slump in sales. As measures of the crisis, the 2010 British International Motor Show has been cancelled for the first time since 1939 and luxury carmaker Jaguar is due to receive a £300m lifeline from the European Investment Bank.
Dealerships and suppliers, starved of credit, have resorted to creative financing terms to draw in customers, but to little effect. Most manufacturers have had to resort to production halts, staff cuts and reductions in salary packages across pay grades including senior management. Franz-Josef Paefgen, chief executive of uber-luxury British carmaker Bentley which counts the Queen amongst its esteemed clientele, reportedly took a ten percent decrease in pay.
Yet, amidst the gloomy headlines, there are clear indications that the luxury car industry is not taking this lying down. Indeed, while every aspect of car making has been affected and belt-tightening is the order of the day, one of the few budgets not to have been slashed is money allocated to research and development. Luxury consumers now not only seek low-key luxury goods, but greater purpose to their lives as well. At the very least, they want to be reassured that their luxury goods are ethically sourced and will harm the environment as little as possible.
Much of the innovation pursued by engineering teams has therefore been focused on developing cars that successfully combine the superior performance expected of a high-powered car with the fuel-efficiency and cleaner fuel technology demanded of an eco-friendly one.
While this newfound social conscience among the wealthy poses a challenge for all sectors of the luxury industry, the conundrum for luxury carmakers cannot be overstated. How does something inherently flashy like a sleek, high-powered luxury car fit into the new ‘discreet luxury’ ethos? How can a product measured in terms of horsepower rather than fuel efficiency be re-packaged to appeal to the now eco-conscious luxury consumer? No small feat, but there are signs that luxury carmakers are indeed making headway.
The Porsche Cayenne Hybrid components
Porsche, for instance, unveiled its Cayenne hybrid at the Geneva Auto Show this past January. It will be the first hybrid offering from Porsche and will include a 333-horsepower engine paired with a 52-hp electric motor. The car will run on a nickel metal hydride battery and reportedly will emit 20 percent less carbon dioxide than the conventional Cayenne. Similarly, BMW has launched hybrid versions of its X6 sport activity coupe and 7-Series sedan. According to BMW, the X6 hybrid will reduce fuel consumption by up to 20 percent as compared to a combustion engine of the same size, while its 7-Series Active-Hybrid uses a V8 gasoline engine and an electric motor with a lithium-ion battery to reduce fuel consumption by 15 percent as compared to a standard combustion engine.
At Bentley, the focus has been on developing a new biofuels-powered Bentley. In the words of Paefgen, “We have to deliver what our customers are looking for and not create technologies which are then searching for customers that want them.” Their strategy consists of first bringing their exclusive cars in line with a target of 15 percent reduction of carbon-dioxide emissions and eventually with a 40 percent reduction, developing an engine that will deliver the performance expected of the classic car while running on biofuels. The Supersports is the first Bentley that runs on gasoline or E85 biofuel. It can go from zero to 60 mph in 3.7 seconds and reach a top speed of 204 mph from the 621-horsepower W12 engine. The ultimate goal is for all Bentleys to be capable of running on biofuels by 2012.
The Bentley bio-fuel-friendly Continental Supersports waits to be unveiled at the 2009 New York International Auto Show
But the innovation does not stop with blue-chip luxury carmakers. Interesting innovation that blends design and performance with clean fuel technology is coming from new carmakers. While they may not possess the rich history and brand recognition of Bentley or Porsche, they make up for it with a passion for, and dedication to, green technology. In fact, it might be argued that to some extent, the blue chip carmakers are merely following the lead of smaller eco-friendly carmakers for whom innovative clean fuel technology is not just an optional feature but a very cornerstone of their brands.
Take for instance the Fisker Karma, a sports car created by Fisker Automotive, an American premium sports car company whose entire raison d’etre is to offer a serious environmental alternative to other premium performance luxury cars on the road today. Founded by Henrik Fisker and Bernhard Koehler, alumni of BMW and Aston-Martin respectively, their sole mission is to build a luxury sports car that is environmentally friendly without compromise to style or performance.
Their first offering is The Karma. It uses something called the Q-DRIVE plug-in hybrid technology which consists of a small gasoline engine that turns the generator, which charges a lithium ion battery pack that powers the electric motor and turns the rear wheels. When fully-charged, the technology enables it to burn no fuel for the first 50 miles. Once the 50-mile electric range has been exceeded, the car operates as a normal hybrid vehicle. According to the company, The Karma can go from zero to 100 km in less than 6 seconds and reach a top speed of 125 mph (200 km/h).
Another luxury eco-friendly car of note is the Venturi Fetish, a sleek, hand-assembled, made-to-order automobile of French design that has the distinction of being the first electric sports car in history. Unveiled at the 2002 Geneva Motor Show, its design cleverly integrated the emission standards for Europe, Japan and the USA from conception, enabling it to be marketed and sold in key target markets simultaneously. The Fetish can accelerate from zero to 100 km/h in less than 5 seconds and attain a maximum speed of 170 km/h. Venturi has also gone to great lengths to ensure a 350 km range on a fully charged battery.
But perhaps the most impressive candidate amongst this new breed of luxury car is the Scorpion, asleek, curvaceous sports car manufactured by Ronn Motor Company, a Texas-based carmaker dedicated to building premium, handcrafted, eco-friendly automobiles. The Scorpion runs on something called Hydrogen Fuel Injection technology, a process by which hydrogen is produced through water electrolysis using power generated from the car’s electrical system. A small amount of hydrogen added to the vehicle’s intake air/fuel mixture allows the engine to operate with less fossil fuel.
This, according to the carmaker, boosts fuel mileage by 20 to 40 percent, all the while producing negligible carbon dioxide emissions. More than any of the eco-friendly cars cited above, the Scorpion, with its ability to break the 200 mph speed barrier, probably comes closest to bringing together the world of high-performance cars with eco-friendly fuel solutions. Ronn Motor Company is poised to introduce a version of the car equipped with a turbo for added power shortly.
The Ronn Motors Scorpion
While these cars may not rival the top speeds and performance of a Porsche or the prestige value of a Bentley quite yet, their innovative green technology has done much to dispel public perception that eco-friendly cars lack performance and long-range capability. Perhaps more importantly where the design-conscious luxury consumer is concerned, their sharp, sexy designs are helping to reconcile the higher style aspirations of the typical luxury consumer with heightened concerns for the environment.
Indeed, the aesthetic appeal of any luxury car is an important one both in terms of perceived desirability and brand recognition, something largely overlooked by earlier eco-friendly cars whose design could perhaps be best described as “quirky”. At least for the Venturi Fetish, the Scorpion and the Fisker Karma, one senses that their design teams understood this aspect from the start and made no compromises.
It’s not unthinkable that these smaller, eco-conscious carmakers could have an edge over their older, more prestigious peers in the sustainable luxury race. As luxury consumers continue to reassess their values and priorities, the way to their hearts and their pockets may no longer be via the bigger, stronger, faster cars of old but instead the sleek, guilt-free, eco-friendly ones that make them feel better about themselves and their place in the world.
Russell Datz, Spokesman for Fisker Automotive, explains it in these terms: “It costs more to live an eco-friendly lifestyle. Driving an environmentally friendly luxury car is the new status symbol. It’s a new kind of luxury.”
What is more, cars like the Fisker Karma and Venturi Fetish do not have a politically incorrect gas-guzzling, ‘bling-bling’ image to live down. They have a clean slate from which to build a brand whose image is precisely tailored to luxury consumers’ new eco-friendly and socially conscious aspirations. This could very well prove to be an important advantage in wooing the elusive high net worth clients willing to shell out between 90 and 600 thousand dollars for their eco-friendly cars. As Datz puts it: “This is an amazing, once-in-a-lifetime opportunity for Fisker Automotive to gain a foothold in the luxury car market. We feel like the stars are aligning for our company.”
The presence of these upstarts in the luxury car marketplace is reshuffling the decks; and while it’s still too early to predict their impact, their contributions to advancing clean fuel technology without compromise to performance and design inevitably will result in better choices for the well-heeled eco-conscious consumer. This is a good thing.
To be clear, many of these cars have been in development since before the global crisis and it would be inaccurate to ascribe innovations in cleaner fuel technology exclusively to the shifting tides in consumer behaviour. This said, one senses that the reversal of global fortunes has certainly heightened the need for luxury carmakers to respond to a greater demand for environmentally sound products.
As Paul Williams of Bentley points out: “We’ve been developing our flex-fuel engine which enables our cars to run on either gasoline or biofuel with no difference to performance since 2006. What it has done is it has placed us ahead of the curve in terms of offering our customers an eco-friendly product and that has become a unique selling point in the current market.”
In the end, the downturn has galvanised the luxury automobile industry and forced car companies to prioritise the development of cleaner, environmentally friendlier cars. Luckily for luxury carmakers, most of these eco-friendly cars are due out at the end of 2009 or early 2010 which coincides roughly with projected start of recovery.
Like so many things in life, while timing may not be everything, it does still count for quite a lot.
Helene Le Blanc writes a blog at " target=“_blank” title=“http://www.theluxechronicles.com__”>www.theluxechronicles.com