1.Age: 

Generally, young people prefer to sports car such as Lamborghini and Ferrier, middle age people usually like the car more business or more comfortable like Rolls Royce and Bentley. According to autoguide which is an reliable car news website. Rolls says the average buyer for its flagship Phantom model is in their 50s to 60s, while the more affordable Ghost (it starts at $263,000) is roughly 10 years younger. (Wood, 2018)

 

2.income: 

However, not everybody can afford the luxury car, the luxury car customer must have very high income. So, the income is an important factor of luxury car demand as well. According to Richard Carter, Rolls Royce Global Communications Director, as much as 80 percent of Rolls buyers build their fortunes by themselves. The Rolls is their reward. Carter adds that the other 20 percent are often celebrities and athletes (may of which are, arguably, self-made).

 

3.individual interest: 

Sometimes, for some reasons, some people are interest in one car brand. Many people prefer Rolls Royce because of their unique customization service.

 

4.price and competitor’s price: 

There are many different luxury car brands, for instance, Bentley is the competitor of Rolls Royce, they have many competitive model of car, for example, Bentley Flying Spur and Rolls Royce Ghost. Doubtlessly, the price fluctuation

 of Bentley will impact the demand of Rolls Royce.

 

 

The factor can impact Supply: 

1.Cost:

Raw material: material is one of the cost of manufacture which can influent supply, for instance, the Rolls Royce engine is famous for the high quality. There are many metals as the raw material of engine such as aluminum alloy and nodular cast iron. The price of those materials fluctuation will influent the cost of production, then, it will influent supply.

Labour: labour is another cost of production as well. All production should be done by labour. Rolls Royce is a luxury car which have many hand-made productions. So, the factory need many skilled worker. Materials Engineer salaries at Rolls-Royce can range from $64,897-$71,470. (Glassdoor, 2018)

 

2.Legislation:

Legislation is another important factor which will influence the supply of luxury cars. For example, as stipulated in the agreement, if the law restricts the export of the cars, the supply to other countries will fall. But if the law makes the import tax increase, there will be less supply for domestic use.

Income Elasticity Demand(YED). The buyer of luxury car is usually entrepreneur or senior executive in big corporation. Their income is not only salary but the shares of some listed company. So, we think the YED of luxury car is greater than 1. 

Price Elasticity Supply(PES). The PES of luxury car is less than 1, because each Rolls Royce car has many hand-made parts, for example, as I just said, the engine of Rolls is complete hand-made, the other parts such as leather seats and air-inlet grille. All of those will spend a lot of time. So, even though the price of luxury car increases, the manufacturer cannot supply too much car in a short period of time.

Cross Elasticity Demand(XED). Substitute: other luxury car brands. For example, the substitute of Rolls Royce is Bentley, the price of substitute rise will lead to the demand of goods increase. Complement: petrol. The price of petrol increases will lead to the demand of goods decrease. Even the luxury car