Luxury Cars Targeting Emerging Markets

Almaty - In the run down, dusty and potholed street of Almaty, Kazakhstan, high tier luxury cars brands, in the likes of Bentley and Rolls-Royce, are setting up shop in what they have identified as the location of an emerging market.

While the average monthly income in Kazakhstan remains to be $330 a month, a minor but ultimately extremely wealthy population have arisen out of the dust of post-Soviet occupation. Certainly, there is a significant enough number to attract these high end brands, where a $294,000 Wraith makes even small sales volumes matter.

Almaty’s wealthy class made their enormous fortunes through selling oil and metal riches under the post-Soviet privatisation implemented by President Nursultan Nazarbayev. However the privatisation of the country’s natural resources led to an even wider differentiation between the country’s rich and poor, where a doctor typically makes less than $500 a month.

However, it is not only in Kazakhstan where these luxury marques are opening up new showrooms. Four of the six new dealerships that Rolls-Royce opened last year were in Azerbaijan, Cambodia, Mexico and Kazakhstan. According to the IHS Automotive report, demand for these high-end luxury vehicles in these “frontier” economies is set to increase by 9% towards 2020, in comparison to only 2% in the established economies of North America and Europe.

In a case where more people in Kazakhstan have put in an order for Bentley’s new SUV, the Bentayga, than in neighbouring Russia, Peter Schwarzenbauer, the BMW management board member simply explains “We saw demand in nontraditional markets...that’s why we’re going there”.