A line of super sports cars was parked along Lamar Thursday afternoon in front of the new Lamborghini dealership. Inside, the Italian car manufacturer's first major venture into the SUV market was rolled in. Company executives say the vehicle represents a major investment in a new direction.
"So in terms of risk, I'd say it’s more than just calculated,” said Alessandro Farmeschi, COO of Automobili Lamborghini Americas.
A lot of research went into the design of the SUV, just like Lamborghini's decision to move to Austin.
"We see potential in this area, in Austin, potential customers, clients, captains of industries, entrepreneurs, younger entrepreneurs who have their own business and are real successful in the market of new technology,” said Farmeschi.
Like Lamborghini, the owner of Austin’s Ferrari dealership is also betting on central Texas. A new facility has been built along I-35's motor-mile.
"We've only started to tap into Austin's market. The growth is exponential and there is no limit to it really,” said Ferrari Sales Ambassador Alexandre Ramon.
New dealerships for BMW and Volvo are also being built in Austin. Economic experts are not surprised high end investors are doubling down on Austin. And while they don’t believe this is some type of financial bubble, they do have a warning.
"So this is just a reflection of what’s going on in Austin. Typically retail and hotels are somewhat lagging indicators. People don’t go bringing a Ferrari dealership, Maserati or Lamborghini dealership hoping something will happen. They don’t build a fancy Hotel hoping something will happen. They do those things after something has happened,” said Dr. Ray Perryman with the Perryman Group.
Business and wage growth in Austin continues to outpace the state, according to a recent report by the federal reserve bank of Dallas. But the good news comes with a downside.
"Something that we are keeping an eye on is just the tightness of the labor market in Austin. So Texas in general we've seen the unemployment rate fall to its lowest in at least 40 years. So when you have unemployment that low it just makes it difficult for businesses to find skill workers,” said Chris Slijk with the Federal Reserve Bank of Dallas.
Mobility, water and sewer infrastructure problems also pose a threat - and keeping the coolness- that made Austin a destination for young executives is critical according to Perryman.
"It’s a case of you can’t build to accommodate the peak, so you'll always will have a certain amount of congestion, it’s just trying to get that under control relative to other places, and I don’t see Austin on a trend that would take it to a point where you'd killed the Golden Goose,” said Perryman.
Perryman says people coming into Austin for the festivals and races are also feeding the demand for these high end vehicles. The base price for Lamborghini's new SUV is at $200,000.