Ridiculous as usual, but fine, I'll bite. There is always going to exist a market that caters to the super rich, it is relatively miniscule in the grand scheme of things, and if you think it is the concern, you just don't understand how the world works.
I am literally paid for my understanding of the world and have used it to co-found & lift 4 separate companies which have all gone to have successful financings and move into commerciality at scale, and done +$2.5B of advisory / M&A / financings in my career so far. So no, i have a pretty good grasp, thanks.
If you go to other nations, you'll see how big the wealth gap gets over time. Companies cater to capital, not people.
Nothing i said is wrong: Accumulation of capital will include accumulation of physical assets including high end cars, which like art are status symbols and a commodity in that community in their own right.
There have never been as many different super cars, hyper cars and high end luxury cars as there are now. Both in terms of sales & in terms of diversity, cost, etc.
Regular cars will continue to be an increasingly expensive burden on people as credit and budgets are stretched by "aspirational buyers" wiling to pay for the perceived status while people who need a car for utility will deal with an inflated used car market as a result. In some places you need to spend a fortune even to land a Toyota Camry with plates & reg.
And what I said about companies catering to whoever the highest paying group is who can fully utilize their capacity, who have the lowest standards.
Nothing about that is controversial. Companies chase capital efficiencies, and the less you have to spend on CAC, the more the margin you can charge, the less working capital you need, the better.
And what you said about the "superrich" is idiotic. They literally control the vast majority of capital and deploy it into cars in huge $ amounts, through single relationships with easier sales process & repeat buying. The global supercar market is going to exceed $35 billion dollars in the next few years, with huge margins and huge capital efficiencies.
Companies like Porsche, Ferrari, etc have margins over 20% while the rest of the market is bouncing around the 3% - 7% range IF they're good and competitive. So that means that $35B delivers margins of $7B while you'd have to sell $200B+ of cars assuming a high margin just to match it. Toyota only does about $300B a year of top line and that includes everything.
Beyond their margins, their capital expenditures on a diverse lineup of normal cars is huge. Regular cars aren't necessarily cheaper to develop, they run multiple models in parallel and will easily spend a billion or more on a single car release.
Toyota also spends $25 - $35 BILLION PER YEAR on capital expenditures. So they spend $20B+, to generate $21B at 7%.
Ferrari does $200 - $400 MILLION per year of capex. That's literally 1 / 100th of Toyota. To generate 3x the margin. They did almost $7B in revenue. At 20% that's $1.4B on that limited spend per year. That's 3.5x the capital spend, or 1% of Toyota's spend to generate 7% of Toyota's margin.
Toyota would have to generate $20B in sales to match that, and that $20B would take $2+ billion of annual capex.
And Toyota has the best margins vs the other large OEMs.
And that doesn't look at the dealer network, etc that you have to put up with and all that supply chain management & relationship management.
Instead, these companies increasingly are creating bespoke divisions where you can make insane custom cars with price tags for individual units that match entire deployments of other models.
Nobody is starting new companies selling cheap cars in the west. Everyone is moving up market to cater to the money & to capture as much margin as they can for as little outlay as they can.
Who wants to spend more time and energy developing and selling for smaller margins, when you can do less and get more?
Who would want to sell Camry's when you could be getting paid on Ferrari's?
