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Tuesday, July 23, 2024

Luxury car sales in high gear

Sales of luxury cars in Norway sped to new heights last year and are still rolling along. Porsche, Mercedes and Audi dealers all reported record sales, with Porsche selling twice as many cars in 2012 as it did in 2011.

The Porsche 911 Turbo can reach top speeds of 315 kilometers per hour (kph), but not in Norway, where the maximum speed limit is 100kph. ILLUSTRATION: Porsche
The Porsche 911 Turbo can reach top speeds of 315 kilometers per hour (kph), but not in Norway, where the maximum speed limit is 100kph. Sales are nonetheless brisk.  ILLUSTRATION: Porsche

This is perhaps surprising in Norway, where roads are subject to snow and ice, and car owners spend a lot of the winter months struggling to drive out of snowed-in parking spaces, up steep and treacherous icy roads or just out of their own driveways.

And while some of the latest models of Porsches can reach top speeds of around 315 kilometers per hour (kph), the maximum speed limit in Norway is just 100kph (60mph) on motorways and only 50kph in town. Porsche owners thus can’t use their vehicles to their full extent in Norway, at least not legally.

Luxury cars also carry a particularly high price tag in Norway because of limited dealership competition and the country’s tradition of punitively high taxes on luxury items. The price of a Porsche 911 Turbo, for example, has a starting price of around NOK 2,167,000 (more than USD 370,000) in Norway. Car owners also face additional “fortune taxes” on the value of the car, raising the cost even higher.

‘More socially acceptable’
Norwegians have traditionally tended to look down on others who flaunt their wealth or status too openly. “Don’t think you are anything special” is the first rule of Jante’s Law (janteloven), the concept which is often used to describe the tendency in Nordic countries to emphasize conformity and collective effort over individual success.

Norway’s strong economy, however, has made buying luxury goods more socially acceptable, according to Karl-Fredrik Tangen, associate professor at the Oslo School of Management (Markedshøyskolen). “High prosperity gives the illusion that status cars are within the reach of everyone,” Tangen told newspaper Aftenposten.

The president of Porsche Club Norway, Øyvind Carlsen, told Aftenposten that its members do not buy Porsches for status reasons. “It has more to do with the dream they had as children … and their feelings for the car and its history … it’s mostly those with the big BMWs and Mercedes, the stockbrokers and bankers and the like, who use cars to show that they have money,” he said.

Associate Professor Tangen, who has studied car choices among different groups in society, said that cars are still important status symbols, but that people just don’t talk about it. “The car is a very visible marker of the difference between people. But in Norway, you’re supposed to downplay those differences. So that’s why there are very few people who would give the reason for their choice of car as a desire to impress,” he said.

Sending signals
While some people use cars to show they have money, other use them to show they have distanced themselves from money, according to Tangen. “Even not washing the car gives the clear signal that ‘I have more important things to attend to,’” he said.

Those with more money than education, tend to have more expensive cars than they can afford, he added, while those with more education than money tend to be able to afford a much better car than they actually have.

Car analyst Anders Hovde, at TNS Gallup consultancy, also believes status means different things to different groups. “What is status to one person, can be totally tacky (harry) to another,” he said. The concept of what is a status car has also changed from being a big car with smoked glass windows to the more moderate 4×4 SUV (sporty utility vehicle), which he says shows people that you have active leisure time.

Those who buy SUVs often use practical reasons to justify their (expensive) choice, according to Tangen. “They say that they want place for the kids, that they want to feel safe, or that they need a 4×4 to get over the high mounds of snow in West Oslo,” he told Aftenposten. Or else they might use the excuse that they have just chosen “something to play with,” he said.

Carlsen of Porsche Club Norway does, however, admit that it doesn’t “go unheeded” to drive around town in a Porsche Turbo, and says it’s like going out in “your shortest skirt.” It also provokes varying reactions from onlookers. “Some clap. And others hold their hands over their ears to show that they don’t like the noise,” he said.

Views and News from Norway/Elizabeth Lindsay

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