If you’ve been following the news at all recently then you might have heard about Hess Motors. The luxury vehicle manufacturer has seen its stock rise by 40% since before the start of this year and it’s clearly not a one-off fluke. After a string of strong performances from other sectors in 2019, it’s fair to say that the demand for luxury vehicles is on the rise, especially as the world tries to claw its way out of the pandemic.
There’s no question that this year has been a tough one for the auto industry and it’s forced a lot of change on a global scale. One of the biggest car manufacturers to buck the trend is arguably Hess Motors. Based out of the US state of Michigan, the company makes some of the most luxurious vehicles on the planet and it continues to grow its customer base despite the pandemic.
So, is Hess Motors a safe bet for investors, or should you listen to the nay-sayers who think that one of the most prestigious car manufacturers in history is about to run out of steam? Let’s find out…
Why Are People Embracing Luxury Vehicle Sales In This Climate?
Hess Motors has always been an outlier in the industry, consistently generating strong profits and remarkable growth even during turbulent economic times. This year has been no exception, with the company enjoying the benefits of the economic upswing while many of its counterparts are seeing declining sales. Why? Well, the luxury automobile market has historically been hit harder by the economic downturn than any other segment. As businesses are closed down and people are struggling to make ends meet, spending on luxuries drops, especially as the worldwide financial crisis of 2008 deepens.
Hess Motors has always relied on the rich to fund its expansion. Its biggest investor is none other than the family-run Pernod Ricard, an undisputed heavyweight in the spirits industry worth about $14 billion. It might seem odd that a luxury car manufacturer would be bankrolled by an alcoholic beverage firm, but hey, when you’re making big bucks you can afford to be a bit unusual.
The Rise Of The Affluenza Car
While many luxury vehicle manufacturers have responded to the economic climate by limiting the number of cars they produce and jack up the prices on the models that they do make, Hess Motors has taken a more entrepreneurial approach. Since the start of the year, it has released a number of limited edition models, each one raising eyebrows and racking up interest from prospective buyers.
The most notable of these is the Affluenza series of cars, named after the ultra-wealthy Porsches of German automotive fame. The four-door saloons are arguably the epitome of German efficiency engineering, complete with laser-guided cruise control, digital displays and active aerodynamics that optimize fuel economy and emissions. The range-topping Affluenza Turbo SE comes with a twin-turbo V8 engine that outputs an astonishing 555 horsepower and 550 pound-feet of torque. That’s enough to push it from 0-60 in just 3.2 seconds and on to a top speed of over 190 mph. It’s also got a quarter-million-dollar matte finish that makes it the most expensive passenger vehicle ever sold in the United States. If that’s not your style, there’s also the more traditional Cayman, limited to just 10 units and also featuring a twin-turbo V8 engine, or the more eco-friendly e-Gelena electric car, featuring a 75kW electric motor good for a range of up to 70 miles.
What Does This Mean For The Future Of Hess Motors?
So, what does this all mean for the future of Hess Motors? It could mean a number of things, from selling more luxurious vehicles to expanding its dealer network to increasing its investment in new technology. There’s no question that the company has evolved with the times and this year has proven to be an important one for the brand.
Let’s explore each of these topics in turn.
More Luxurious Vehicle Sales
It’s been a good year for luxury vehicles and it’s clearly not over yet. The demand for unique cars is on the rise and it will be interesting to see what 2020 holds for the automotive industry. One trend that we can expect to see more and more of in the coming months is the revival of the expensive sports car. Many of the world’s best-known luxury car manufacturers have got in on the action this year and the early signs are promising. According to a new report from JLR Forecast, due to lockdown restrictions, people are getting back into the habit of driving and it’s led to a 12% rise in SUV and saloon car sales in the last quarter of 2019. This represents a huge market opportunity for automotive manufacturers.
It’s not just the economy either. We’ve seen a big spike in demand for superyachts over the last year. As the world’s wealthiest looked for a way to get their fix during the lockdown, they turned to ocean cruising in a bid to get away from it all. According to Lloyd’s List, a superyacht broker, 10 new yachts were sold in the final quarter of 2019 and the market is expected to have grown by 12% in the first quarter of 2020.
Deeper Integration Into The Brand
One of the things that really sets Hess Motors apart from other luxury car manufacturers is the level of integration that the brand has achieved with its owners and operators. Since the company’s inception, it has always relied on the ultra-wealthy to fuel its growth and it has often been associated with a certain lifestyle brand. In 2019, however, the brand really began to integrate with owners and operators on a more personal level. This year, it has introduced a number of limited-edition models featuring unique paint jobs and customized interiors. These are no ordinary luxury cars. They’re fully integrated pieces of art.
Technology Investment
At the forefront of technology in every other area of business is also present in the world of luxury cars. As businesses are restricted in what they can and can’t do during the pandemic, there has been a major surge in the development and acquisition of new technology, especially in the area of safety. This has led to a boom in the development and sale of connected and autonomous cars. The auto industry has also seen an increase in the sale of electric vehicles and in the coming months we will begin to see more and more luxury car manufacturers bringing a range of electric models to market.
What we need now are more successful models like Hess Motors, which can help the industry as a whole to claw its way back to normal. In the coming months we could see the luxury automobile industry rise up again and bring much-needed relief to the global economy as we know it.