SUGGEST to Torsten Müller-Ötvös, the boss of Rolls-Royce, that he runs a carmaker and with a shake of the head, he explains that he is in the luxury-goods business. You are not buying a car but “commissioning a work of art…building a dream”. Whether swathed in leather from pampered cows or stuffed with racing-car technology, ultra-expensive cars are made by firms that have little in common with the rest of the industry. Ferrari, a maker of sleek Italian sports cars (whose chairman, John Elkann, sits on the board of The Economist’s parent company), saw its valuation soar after it was spun off from Fiat Chrysler in 2016. The investors who own Aston Martin, bought from Ford in 2007 for £500m ($1bn), hope to reap similar rewards. An initial public offering in the next few weeks is expected to value the firm at around £4bn-5bn.

The numbers alone show how scant a resemblance such firms bear to mass-market auto manufacturers. Six firms dominate the ultra-luxury sector, where prices start at around $200,000: Ferrari, Aston Martin, Rolls-Royce (owned by BMW), Bentley and Lamborghini (both divisions of the Volkswagen group), and McLaren. Along with a few tiny specialists, such as Italy’s Pagani and Sweden’s Koenigsegg, which make track-inspired hypercars (whose prices start at $1.4m), these firms sold 29,600 cars in 2017, compared with sales of 86m by regular carmakers, according to JATO Dynamics, a research firm. As with superyachts, fine watches and the like, sales of high-end cars have boomed along with the numbers of the global rich. Annual growth looks set to stay at around the 10% mark for the next few years, compared with 2-3% for the car industry as a whole.

Luxury cars are sold for entertainment, not transport, says one executive. Instead of striving to sell as many cars as possible, production is often limited in order to maintain exclusivity. In 2013 Ferrari even elected to cut volumes slightly, from around 7,400 to 7,000 a year. According to Enzo Ferrari, the firm’s founder, the ideal is to make one fewer car than the market wants. This means long waiting-lists and vehicles that sell at the advertised price instead of with the discounts common in the mass market.

The relationship with buyers is also unlike the “sell and forget” model of other carmakers. Many customers are collectors, each with a garage-full of fast cars. They are often invited to watch their cars being made. McLaren’s factory includes a purpose-built viewing gallery. No ordinary carmakers offer the same range of custom-made accessories, nor do they invite buyers to the factory to select them in person. At Rolls-Royce’s in-house “atelier” customers can fondle a range of rare woods and other fine materials before making a choice. Bentley offers a Breitling Mulliner Tourbillon clock that costs almost as much as the car it adorns. It is all rather like being measured for a Savile Row suit, says Andy Palmer, the boss of Aston Martin.

For the chosen few, ownership buys entry to an even more exclusive club. Spend on several regular models and you might be invited to put your name down for a limited-edition hypercar, such as the upcoming McLaren Speedtail—only 106 of these beasts will be made and each will probably be capable of hitting 250mph. Such fire-breathing road-rockets are constructed at a cost of $2m or more. They are massively profitable and usually in such demand that they can be resold immediately for a big return. To ensure that these cars remain the property of the tech billionaires, Hollywood A-listers and sheikhs who are lucky enough to be chosen to buy one, their manufacturers operate blacklists barring anyone who has previously flipped a vehicle. Other perks include invitations to “track days” where outrageous performance can be properly tested, and the carmakers can find out what their customers want next.

But however much these firms disown the label of carmakers, only Ferrari’s margins, at over 30%, are known to put them in the same bracket as luxury-goods firms (for comparison, Germany’s premium carmakers notch up margins of around 10% in a good year). That is partly because Ferrari has been unusually successful at mastering the trick of the “diffusion line”. Just as Chanel makes a few thousand $2,000 handbags but coins it selling lipstick to the masses, Ferrari also sells cheaper branded goods such as watches and clothes, even down to a $50 baseball cap.

The difficulty of attaining couturier-like margins also stems from the fact that these businesses retain some trappings of the everyday carmaker. A clothing firm needs to worry about changing hemlines; it does not have to bother with emissions regulations. Capital spending is much higher for an ultraluxury carmaker than for a handbag designer. And though most have coped with the growing taste for SUVs, for Ferrari, whose brand is based on hard-core sports models, its plans to make a beefier car, like Bentley’s Bentayga or the Lamborghini Urus, may prove difficult.

Selling cars built for driving pleasure should confer some immunity from industry-wide upheavals like the advent of car-sharing or autonomous vehicles, at least for the time being. A bigger problem, especially for sports-car firms, is the trend to electrification. Hybrid engines can make fast cars faster, but they would also silence those throaty exhaust notes that shout “Look at me”.

Couture or clunker

Aston Martin’s IPO will provide further clues to which category ultra-expensive carmakers really belong. It is planning a new SUV and electric saloon, as well as branching out into other areas such as boats and property. A successful debut might tempt others to do the same. McLaren once considered a flotation and may do so again. VW has bundled Bentley and Lamborghini into a “super-premium” group with Bugatti and Porsche that could potentially stand alone in future. If a series of such brands tap the markets, that would provide a clearer answer to the question of whether luxury cars have more in common with LVMH and Hermès than with Ford and Toyota.