Makers of very expensive cars want to be luxury-goods firms

SUGGEST to Torsten Müller-Ötvös, the boss of Rolls-Royce, that he runs a carmaker and with a shake of the head, he explains that he is in the luxury-goods business. You are not buying a car but “commissioning a work of art…building a dream”. Whether swathed in leather from pampered cows or stuffed with racing-car technology, ultra-expensive cars are made by firms that have little in common with the rest of the industry. Ferrari, a maker of sleek Italian sports cars (whose chairman, John Elkann, sits on the board of The Economist’s parent company), saw its valuation soar after it was spun off from Fiat Chrysler in 2016. The investors who own Aston Martin, bought from Ford in 2007 for £500m ($1bn), hope to reap similar rewards. An initial public offering in the next few weeks is expected to value the firm at around £4bn-5bn.

The numbers alone show how scant a resemblance such firms bear to mass-market auto manufacturers. Six firms dominate the ultra-luxury sector, where...



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