Europe Luxury Cars Market Size, By Vehicle, By Fuel, By Price, By Sales Channel, Growth Forecast 2025 – 2034

Europe Luxury Cars Market Size

The global Europe luxury cars market size was valued at USD 10.5 billion in 2024 and is estimated to register a CAGR of 4.4% between 2025 and 2034. The growth of electric luxury offerings is changing the buying patterns in the European region. There has been a rise in the number of people who are environmentally conscious class of consumers in Europe, and at the same time are not willing to compromise on performance, technology, or comfort of the vehicle.
 

Electrified and plug-in hybrid versions of popular models are now being offered by luxury brands as a status vehicle to capture the interest of modern and tech-savvy consumers. Additionally, as governments enforce stricter emission regulations and provide subsidies for low-emission vehicles, luxury electrified automobiles are becoming socioeconomically appealing. This shift also helps brands in distinguishing themselves through innovation, advanced software, high-quiet and performance drivetrains, leading to a renewed loyalty in an ever-changing market.
 

Increasing disposable income coupled with a growing wealthy population in Europe is expanding the demographic of individuals able to afford luxury vehicles. With more people climbing up on higher income levels, especially in metropolitan and economically thriving zones, there is demand for products that showcase achievement and personal brand. Luxury vehicles, endowed with superior specifications, are effortlessly positioned as the go-to option for expenditure among these consumers.
 

Europe Luxury Cars Market Trends

• Fuel emissions laws and the continuing shift in consumer preferences is making European luxury automakers switch to electric vehicles and plug-in hybrids. BMW, Audi, and Mercedes are already increasing their EV offerings as performance and range is at par with or exceeding traditional ICE car standards.
   
• Ferrari, in May 2024, announced its plan to launch its first fully electric supercar, the Elettrica. The car's technical details are expected to be released on October 9, 2025, and the vehicle delivery will be starting in October 2026. This indicates a milestone for the Italian manufacturer which has relied on combustion engines for decades. This launch will showcase it shifts towards electrification as part of a broader strategy that encompasses petrol, hybrid, and electric vehicles.
   
• Younger luxury car buyers place greater emphasis on technology and are focusing more on brand connectively, sustainability, and brand story. This is forcing brands to shift their focus on software updates that can help control the infotainment systems and voice-activated command systems that control various functions and settings within the vehicle.
   
• Luxury brands are actively incorporating eco-friendly materials, ethical sourcing, and carbon-neutral production into their branding and manufacturing. In response to consumer demands and regulatory standards, vegan leather and other recycled materials, along with green production processes, are being prioritized.
   

Trump Administration Tariff

• European manufacturers such as BMW, Mercedes, and Porsche have a significant presence in the American automotive market. Having to deal with inflated tariffs would result in increased costs of vehicles within America which would lead to a reduced sales volume. This fall in revenue would limit production and affect the European automotive industry's growth in Europe.
   
• Through tariffs, automakers either have to absorb increased costs or transfer these costs to consumers, both of which impact profitability. European luxury car manufacturers may have to restructure some production or supply chains which would result in reduced investment in research and development, expansion, and the domestic market.
   
• Due to trade disputes and policy changes, making long-term strategic investment and production plans can become difficult. This uncertainty may force automakers to postpone rollouts of electric powertrains and expansion activities in Europe, thereby decelerating innovation and market momentum.
   

Europe Luxury Cars Market Analysis

Based on vehicle, the market is segmented into hatchback, sedan, SUV, and sports vehicle. In 2024, the SUV segment was valued at around USD 4 billion and held a market share of over 40%.
 

• Luxury SUVs cater well to long-distance travelers and families as they require ample space and offer an elevated driving position along with flexible cargo space. Buyers in Europe, especially in the suburbs, prefer these vehicles for their practicality and comfort.
   
• SUVs are perceived as safer vehicles due to their weight, bulk, and height. Their physical ability to protect passengers makes them appealing to older people and families looking for a family vehicle.
   
• A large number of luxury automakers are releasing electric SUVs as the body style easily accommodates a large battery pack while providing ample space for passengers. This complies with changing EV preference in the region, which is preferred and supported by both the government and residents of Europe.
   
• With the aim to cater to the European markets, Chinese luxury electric vehicle manufacturer Zeekr launched their all-electric SUV Zeekr 7X in December 2024. The car is equipped with advanced technology, performance capabilities, and luxurious features, and aims to compete with established competitors such as Tesla Model Y and other European luxury SUVs. It was developed in Gothenburg, Sweden and Hangzhou, China.
   

Based on the sales channel, the market is segmented as franchised dealer and independent dealer. The franchised dealer segment dominated in 2024 with a market share of around 84%.
 

• Buyers of luxury vehicles give a lot of attention to the reputation of brands, and franchised dealers are owned by the car manufacturers themselves. This means that the whole buying experience: test drive, purchase, delivery, and servicing go through several checks of compliance and quality control. This makes buyers more confident that the car is genuine, unmodified, and backed by the automaker, thus leading to their preference.
   
• Franchised dealers generally can access new model launches, special editions, and other high-demand vehicles before independent dealers. In addition, they provide official configurators and factory ordering systems for customized builds of luxury vehicles, a service that independent dealers often cannot provide.
   
• After-sales care is critical in the luxury segment due to high maintenance, keen brand knowledge, and range of brand-specific technical expertise. Francized dealers provide factory-trained technicians, original parts, and proprietary brand diagnostic software which independent garages often lack. Many buyers also purchase the maintenance package or extended warranty packages but unlike independent garages these are only through franchised outlets.
   

Based on fuel, the market is segmented as gasoline, diesel, and electric/ hybrid. The gasoline segment led the market in 2024.
 

• Luxury cars buyers often prioritize smooth power delivery, high acceleration, and responsive handling, all the functions where gasoline engines excel. Gasoline engines provide quieter operation, higher revving engines, and better performance tuning, particularly in sports sedans and coupes. Performance-oriented models from BMW, Porsche, and Mercedes-AMG still favor gasoline powertrains.
   
• Most luxury variants were designed with gasoline engines first, giving consumers multiple trims and variants to choose from. Even some flagship models like the BMW 5 Series, Audi A6, and Mercedes C-Class still provide more gasoline options compared to diesel or electric versions. These brands and models thus contribute to the dominance of gasoline engines.
   
• Luxury brands including Ferrari, Aston Martin, and Maserati have built their reputations around gasoline engines, with putting major focus on sound, speed, and character. These emotional and sensory aspects are integral to the luxury experience and cannot be replicated by hybrids and EV models, further contributing to the demand and dominance of gasoline.
   

Based on price, the market is segmented as entry level luxury (USD 30K-60K), mid-level luxury (USD 60K-90K), high-end luxury (USD 90K-120K), and ultra luxury (Over USD 120K). The mid-level luxury segment led the market in 2024.
 

• Mid-level luxury cars offer a perfect balance between economic practicality and luxurious features. These vehicles provide comfort, brand prestige, and performance similar to luxurious makes without straining one's budget like ultra-luxury vehicles do. For many professionals and corporate clients, this segment is aspirational as well as attainable.
   
• A major number of automotive brands concentrate on this price band, and also offers the largest variety of sedans, SUVs, and hybrids. From entry-level trims with premium features to higher trims just below the upper-tier mark, this model range contains the most options and is appealing to both first-time and repeat buyers.
  
   

Western Germany dominates the 40% share of the Europe luxury cars market and was valued at around USD 1.5 billion in 2024.
 

• Germany is home to and is a global hub for various major luxury car brands, such as BMW, Mercedes-Benz, Audi, and Porsche. These manufacturers not only lead the sales numbers of luxury vehicles in Europe, but also helps in bringing in the innovation, production, and exports of these vehicles. This makes Germany a significant country for the luxury automotive sector.
   
• Germany boasts world class automotive engineering, research centres, and production facilities especially in Bavaria, Baden-Wurttemberg, and Lower Saxony. These areas strengthen the innovation and manufacturing system by ensuring high levels of output and constant innovation for the luxury vehicles.
   
• Germany has an affluent population combined with a strong automobile buying culture. Statista shared that the total sale of luxury cars went from 12,082 units in 2023 to 23,313 units in 2024. Business professionals, executives, and company owners are the primary users of such cars owing to favourable taxation for company vehicles.
   
• Germany is one of the world’s leading exporters of luxury vehicles. The country also has a developed secondary market system through imports as well as exports of pre-owned cars. A large number of premium vehicles are produced in Germany and sold back to other European countries, thus enhancing Germany’s import market in the regional luxury vehicle industry.
   

The growth forecast for the Europe luxury cars market in UK in Northern Europe region from 2025 to 2034 is highly encouraging.
 

• The UK, and especially London, has several high-net-worth individuals which results in a strong demand for luxury products such as luxury cars. Additionally, factors such as the country's strong economy and high spending capacity of the highly salaried individuals help the country hold and maintain its status as a significant player in this market.
   
• Historically, the UK has been associated with the ownership of luxury cars, which many customers use to display their social status. British consumers tend to be frequent purchasers of luxury vehicles due to their market-leading technology, comfort, and performance, which maintains a high proportion of luxury sales.
   
• The UK is home to many iconic luxurious car brand manufacturers like Aston Martin, Bentley, Rolls-Royce and Jaguar. Apart from serving the domestic markets, these manufacturers have significant exports, thus, the UK serves as the center for the production and consumption of luxury cars. The presence of these brands strengthens the country’s share in the market.
   

Poland in Eastern Europe region is expected to show remarkable and promising development in the Europe luxury cars market from 2025 to 2034.
 

• Poland has the largest economy and population in Eastern Europe, which logically translates into greater demand for automobiles, including high-end vehicles. Statista reported that the country’s strong economic performance together with low unemployment figures has raised consumer confidence and purchasing power. This has resulted in greater demand for luxury vehicles as consumers enjoy enhanced access to disposable incomes.
   
• Poland has undergone a cultural change whereby premium and luxury vehicles are more widely accepted as aspirational status symbols. There is an ongoing transformation in social norms of the people where the attitude towards wealth is changing and hence the demand for those products is higher among newly wealthy businessmen and skilled workers.
   

The Europe luxury cars market in Italy in Southern Europe region is expected to experience significant and promising growth from 2025 to 2034.
 

• Italy is known for manufacturing luxury and ultra-luxury cars and is home to brands such as Ferrari, Lamborghini, Maserati and Pagani. These companies not only define the industrial culture of Italy but also drives substantial domestic value and production of luxury automobiles, despite the fact that they are exported worldwide.
   
• Italy is a prime high-end tourism destination, this creates further demand for high end automobiles from famous tourist attractions like the Amalfi Coast, Lake Como and Sardinia. Here, wealthy tourists and local residents boost the local economy by short-term leases, rentals and even impulsive purchases of luxury vehicles.
   
• Italians also have a strong cultural appreciation for elegance, artistry, and the fun of driving, all which leads to the preference for premium automotive values. Thus, owning a premium car for performance, aesthetics, or as a status symbol is common especially in metropolitan and wealthy regions, serving as an augmentation of self-image.
   

Europe Luxury Cars Market Share

Top 7 companies leading the Europe luxury cars industry in 2024 were BMW, Mercedes, Audi, Tesla, Porsche, Ferrari, and Maserati. Together, they held around 55% of the market share.
 

• BMW holds a significant position in the market with a large luxury portfolio ranging from executive sedans to M model performance and premium SUVs in the X Series. The company is known for its 'Ultimate Driving Machine' appeal which merges brand prestige with sporty performance and cutting-edge technology, thus helping the company secure a position both as a personal and corporate vehicle choice.
   
• Mercedes holds a substantial share of the luxury segment with its strong brand image for style, comfort, and innovation. Its wide product portfolio, from A-Class to S-Class, and GLA to G-Class, caters to almost every luxury sub segment. The brand’s premium positioning, strong leasing programs, and advanced safety features help them in strengthening its position and preferences across Europe.
   
• Audi holds a major share of the market due to its modern technology focused design, quatrro AWD systems, and sleek minimalistic styling. Its compact A3, and midsize A4 and A6 to high end A8, Q7 and e-tron provide a premium feel strengthening the brand's market share. The brand's products are preferred by young professionals and urban buyers looking for subtle luxury.
   
• Tesla’s fully electric models, coupled with brand recognition, sharp marketing, and minimalism are all contributing factors to its rapid growth in Europe. The electric vehicles capture the attention of premium buyers who are eco-conscious and want to have the latest technological performance, and sustainability gear. Moreover, Tesla continues to be one of the leaders in the segment of electric luxury vehicles owing to Supercharger network competitiveness and receiving system updates remotely.
   
• Porsche integrates its historical performance with contemporary luxury to capture both enthusiasts and corporate executives. For example, the Panamera offers refined design and handling while expanding the audience base with SUV models such as the Cayenne and Macan. Its engineering credibility along with strong brand loyalty sustains high demand in Europe.
   
• The luxury car market in Europe is highly competitive, particularly in the mid-range and luxury SUV segments. However, companies differentiate themselves based on competitive factors such as performance focus and tech orientation. This results in fierce non-homogeneous competition with different drivers of brand loyalty.
   
• Companies are now increasingly investing to meet EU regulations and guidelines and fulfil the trends of sustainable mobility. Not only EU norms, but company-specific guidelines like range of vehicles, software integration, and charging stations also determine competition. Companies like Audi and Tesla are at the forefront of modern electric vehicles, while many others are trying to catch up.
   
• In Europe, customers purchasing a luxury car expect more than a vehicle. They expect digital integration, performance, personalized services, and the ability to elevate their social status. This compels manufacturers to invest in and compete not only on design, but also on brand experience, additional services, and post-sale offerings, thereby increasing the competition for advanced customer interaction.
   

Europe Luxury Cars Market Companies

Major players operating in the Europe luxury cars industry include:

• Aston Martin
• Audi
• BMW
• Ferrari
• Lexus
• Maserati
• Mercedes
• Porsche
• Tesla
• Volvo
   

Europe Luxury Cars Industry News

• In May 2025, BYD, a Chinese automotive company, announced their plan to launch their premium Denza brand in the UK. With this launch, the company will be targeting major market players, including Porsche and Ferrari with their cutting-edge electric and plug-in hybrid vehicles. The Z9 GT offers both fully electric and plug-in hybrid variants.
   
• In April 2025, the all-new 2025 Lexus ES was launched, which is considered to elevate sedan styling, luxury, and refinement alongside a host of design, performance, and technology improvements. The Lexus ES gains a competely new sharper and more elegant version of the previous model with a longer body measuring 5.14m and a stretched 2.95m wheelbase with an increase of 165mm from the previous version.
   
• Jaguar Land Rover (JLR) announced in January 2025 that they will be making an investment of around USD 81.2 million wiht the aim of expanding their luxury paint facilities in the UK and Europe. This was triggered by a surge of over twofold rise in the demand for bespoke vehicle personalization of highly customized and unique vehicles, especially around high net worth individuals.
   
• Cadillac, in October 2024, shared that the company is aiming to expand its focus on the European market, specifically targeting electric vehicles. Cadillac also announced of launching the 2025 Optiq, a compact-to-midsize all-electric crossover aimed at global luxury consumers. The vehicle will be introduced in the US and Europe, thus showcasing the company’s intentions of becoming a global player. Optiq is poised as Cadillac’s EV with the most expansive footprint, targeting younger customers and mainstream luxury consumers in over 10 regions.
   

The Europe luxury cars market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Bn) and shipments (units) from 2021 to 2034, for the following segments:

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Market, By Vehicle

• Hatchback
• Sedan
• SUV
• Sports vehicle

Market, By Fuel

• Gasoline
• Diesel
• Electric/ Hybrid

Market, By Price

• Entry level luxury (USD 30K-60K)
• Mid-level luxury (USD 60K-90K)
• High-end luxury (USD 90K-120K)
• Ultra luxury (Over USD 120K)

Market, By Sales Channel

• Franchised dealer
• Independent dealer

The above information is provided for the following regions and countries:

• Western Europe
  • Germany
  • Austria
  • France
  • Switzerland
  • Belgium
  • Luxembourg
  • Netherlands
  • Portugal
• Eastern Europe
  • Poland
  • Romania
  • Czechia
  • Slovenia
  • Hungary
  • Bulgaria
  • Slovakia
  • Croatia
• Northern Europe
  • UK
  • Denmark
  • Sweden
  • Finland
  • Norway
• Southern Europe
  • Italy
  • Spain
  • Greece
  • Bosnia and Herzegovina
  • Albania