Media reports claim that luxury-brand, non-fungible tokens (NFTs) could become a billion-dollar market by 2030. With the advent of metaverse, this space is expected to witness a dramatic hike in demand. As more aspects of our lives shift online, demands for luxury goods and digital fashion are expected to explode.
Several brands have released NFTs to capture the growing potential that this domain holds but most recently—automakers.
Automakers and NFTs
- In June 2022, Italian carmaker, ‘Alfa Romeo’ announced its entry into the NFT space with its latest SUV, ‘Tonale’.
- In April 2022, South Korean auto major, ‘Hyundai Motor Company’ announced its NFT launch in collaboration with ‘Meta Kongz’, an NFT brand.
- In March 2022, Mahindra & Mahindra Ltd. announced the release of its first tranche of NFTs—based on the Mahindra ‘Thar’—in partnership with Tech Mahindra.
- In June 2022, luxury car manufacturer, Bentley Motors announced its first, one-time release on the carbon-neutral ‘Polygon’ network in the NFT marketplace. The venture is scheduled for September 2022 and limited to 208 pieces.
- In January 2022, Italian car brand, Lamborghini released its first limited-edition NFT digital collection of artworks—five in total—accessible only through the Lamborghini ‘Space Key’.
- In March 2022, British luxury carmaker, ‘McLaren Automotive’ announced their entry into the metaverse in partnership with InfiniteWorld, a metaverse infrastructure platform, to provide its customers with a deeper digital experience of original NFTs and digital artwork representing McLaren’s luxury supercars and hypercars.
(Image source: Porsche)
In India, MG Motors was the first carmaker to enter the NFT space in December, 2021.
Carmakers aim to elevate brand experience in metaverse
The global metaverse market was estimated at USD 38.85 billion in 2021. Reports claim that it is expected to expand further at a CAGR of 39.4% from 2022 to 2030.
In view of major investments from big tech firms such as Meta, Google, Microsoft and others in the metaverse, it is expected that NFTs would play a crucial role in elevating future brand experience. Automakers, like tech firms, recognise the value of NFTs in building unique virtual experiences and deeper digital engagement with products. Consequently, the ever-growing list of investors in metaverse has eventually come to include car manufacturers aiming for better customer engagement for their products in the changing trends of consumption.
Veejay Nakra, Chief Executive Officer, Automotive Division, M&M Ltd concurs.
At the announcement of Mahindra’s first tranche of NFTs, Nakra revealed that the launch of NFTs is merely another exciting step-to leverage the next frontier of digital marketing. The company is expecting to be able to offer a whole new set of online experiences to its customers, build communities for its brands and increase brand awareness and loyalty with their launch into metaverse.
Alain Favey, Board member-Sales and Marketing, Bentley, revealed that Bentley customers are living online lives where they buy luxury goods with digital currency and establish businesses in the metaverse. He emphasised that the company recognises the contribution that NFTs have made in raising art as well as artist profiles and understands that the same can be done for the luxury automotive industry.
Similarly, Hyundai believes that the NFT community will provide its users with a unique and better personalised brand experience of their products in the metaverse.
Relevance for the younger generation
In order to attract potential engagement from the present and upcoming generations for their products, any retailer—be it a mass or a luxury carmaker—is compelled to create experiences that are deemed engaging by the younger generation who are heavily invested in NFTs, cryptos and Web3.
In fact, upon entering the NFT space, Hyundai named this set of consumers as the ‘MZ generation’ (i.e., millennials and gen Z).
Thomas Schemera, Hyundai Motor’s Global Chief Marketing Officer and Head of Customer Experience Division revealed that the Hyundai NFT universe is set to extend the Hyundai brand experience, especially to the MZ generation, in an entirely novel way, both in the real world and in the metaverse.