For the better part of a century luxury car brands only did one thing: They made luxury cars. But now they’re beginning to discover they can generate new revenue streams by providing different kinds of services. Even more, they’re discovering their brands have cachet well outside the automotive industry.
Perhaps the most unusual example is Ferrari World, a giant amusement park in Abu Dhabi. Think of it as Disney World with an automotive theme. It’s now one of the most popular tourist attractions in the Middle East and you have to wonder how long it will be before Ferrari builds one in Asia.
Yachts always have fascinated automotive designers, so it should come as no surprise that Ferrari, Aston Martin, Porsche, Lexus, Mercedes-Benz, Lancia, Bugatti and Jaguar all have lent their names to yachts or speedboats. Not only do they earn royalties from these efforts, doing so also ensures their brands are exposed to the very upper crust.
Now they are expanding into high-end real estate. Porsche and Aston Martin recently designed luxury residential buildings in Miami. The entranceways and public areas use design themes developed by each car company. And if you want them to design your own personal condo, they’ll do that too. All you have to do is open your checkbook. And you’d better be ready to spend millions.
Some of the luxury brands are experimenting with services and conveniences for customers. A number of them are partnering with upscale hotels and luxury resorts to make their vehicles available to guests. Land Rover even is offering off-road driving experiences at select resorts that have the proper kind of open land available. Aston Martin is taking customers to faraway places such as New Zealand and Hokkaido for ice-driving adventures. Needless to say, they charge for these experiences.
It has slowly dawned on luxury car brands that they are more than just car brands. They are luxury brands. And with this realization they’re recognizing they can make money by doing a lot more things than just selling cars. The danger is in knowing where to stop. It’s knowing when to say “No.” Putting their logos on baseball caps, women’s handbags and baby strollers (as Ferrari has done) could end up hurting their cachet if they become too ubiquitous. It’s a delicate balance.
Even some of the lesser premium brands recognize they can do more for their customers. Lincoln seems to be doing more experimentation along these lines than anyone else. It offers a pickup and delivery service where someone will come get your car wherever you are to take it in for service, and drop off a loaner. When your car is ready they’ll come swap it out.
Lincoln even will make a chauffeur available in case you had one too many glasses of wine at a restaurant. Or maybe you need somebody to pick up your dry cleaning, or show you how to install baby seats in your car. These services are being pilot-tested in several cities and are offered as part of a special premium lease Lincoln calls Black Label. You get 12 hours of chauffeur service a year, but can buy more time at $35 an hour.
Lincoln even is working with the CLEAR Security Fast Pass that lets you get through airport security faster. Not only will it enroll customers in the CLEAR program for free, it also will have someone meet that customer at the airport and personally take them through security.
As the auto industry evolves into a world of ride sharing and mobility, customer loyalties will flow to those who bring more personal service and memorable experiences into every aspect of their lives. We’re seeing a paradigm shift in the automotive industry where the business case for luxury brands now is morphing into something new that is far removed from engineering and manufacturing.