How the super-rich go car shopping
When it comes to buying cars, people with millions in the bank really aren't like the rest of us.
NEW YORK (CNNMoney.com) - Here's a sales pitch I'll bet you'd never expect for a 20-foot-long $390,000 luxury sedan: "It makes a great gift."
A great gift?
Really, Joseph Horneman, the Maybach Relationship Manager at Manhattan's Mercedes-Benz and Maybach dealership, makes a pretty good case. For busy, stressed out people, the time they can spend in the back of a Maybach 62, swaddled in comfort in their fully reclining -- with footrests -- ventilated leather seats, sipping chilled wine from the built-in refrigerator and basking in the gentle glow of sunlight filtered through the electroluminescent roof....Those moments are precious. Just precious.
Where most people might think "gift certificate for a day spa," others think "Maybach" or maybe "Rolls-Royce." Where some people think "I need a new look. Maybe a new pair of Steve Maddens," others think "Maybe a couple of V-8 Ferraris."
These sorts of cars are considerably more expensive than even Bentley GTs or Maserati Quattroportes. With sticker prices starting well below $200,000 those are cars the working wealthy can afford.
"Those are considered almost consumable prices," said Thomas duPont, publisher of the duPont Registry magazine. "Then you get into $350,000 or $400,000. Those cars take a whole different rationale to sell.
For sedans like the Rolls-Royce Phantom, that means incredible levels of opulence and attention to detail that borders on the bizarrely obsessive. ("Notice how the wood grain is perfectly matched, end to end, throughout the vehicle?") For performance car buyers it means levels of performance approachable only on a race track. In either case, it means extreme levels of exclusivity.
Maybach sold 152 cars in the U.S. last year. Rolls-Royce did considerably better, selling 445. Ferrari sold about 1,200.
To further enhance the exclusivity, just about everything on these cars is optional.
"We give a lot of importance to the process of ordering the car," said Maurizio Parlato, president of Ferrari North America.
The typical Ferrari customer, for example orders $20,000 to $30,000 of options, he said. Ferrari customers happily wait a year or two for their cars.
In the Maybach "commissioning studio" Horneman opened a drawer with 17 colored tiles showing the brand's standard paint options. Another drawer was filled with leather and carpet samples and another with different types of wood trim. Certain rare woods can add as much as $12,000 to the cost of the car.
Many customers, however, impatient to get a car, will buy floor models. Both Maybach and Rolls-Royce say their American customers are often averse to waiting for custom-built cars. One buyer recently negotiated the purchase of a Maybach demonstrator -- and handed over a check -- within 10 minutes of entering the dealership.
In this world, repeat business is extremely important since only a relative few can afford these products. Fortunately, they have the means to keep coming back.
"A handful of customers are just constantly buying cars from us," said Ehren Bragg, chief operating officer of O'Gara Coach Company of Beverly Hills, Calif., a dealership that sells Aston-Martin, Bentley, Bugatti, Lamborghini, Rolls-Royce and the Dutch-built Spyker exotic sports car.
"A larger number of customers buy one car a year," said Bragg, "We probably have 30 or 40 of those people."
You'll never see a TV commercial for any of these cars, of course, since there's really no point. Why buy an ad when you already know the names, home addresses, telephone numbers, birthdays, anniversaries and favorite colors of virtually all the potential prospects in your area?
Marketing is through events and word of mouth. For Rolls-Royce, that means placing cars at classic car shows and wine auctions where the well-heeled can get inside for a taste of the Phantom's rich elegance and its buttery driving style. For Ferrari, it means inviting owners to race their cars on a track against other Ferrari owners. Most Ferrari owners have more than one -- a half-dozen or so is common -- so a Ferrari owner is a Ferrari salesman's best prospect.
For O'Gara Coach, marketing can mean lending out the right car to the right person just long enough for them to be seen in it. A few paparazzi shots of an A-list celeb exiting your hottest new product can work wonders.
Sometimes it can make sense to stretch a little to make a deal for the right person so the product can get the exposure it deserves. Charitable works like that can backfire, though.
"Different celebrities have the same agent," said Bragg, "and they'll all expect that."
Fortunately for Bragg, his dealership is right where all the money is. Even in an economic downturn, Beverly Hills never runs out of ready cash.
"It's not that the wealth goes away or comes back," he said. "The names on the mailboxes change."