Why is a Rolls-Royce an example of a niche product?

A Rolls-Royce is a niche vehicle, because it caters to a very specific and limited clientèle. Furthermore, not only is it targeted towards individuals with robust incomes, but those in particular who are more concerned with luxury then performance. A Ferrari or Lamborghini-both also niche vehicles- appeal to more "performance oriented" consumers. It's very unlikely that a buyer would be torn between purchasing a Rolls-Royce or a Lamborghini; maybe a Rolls or a Bentley, or Lambo or Ferrari, but not Rolls or Lambo. They're just in different niches and appeal to a small and discerning group of customers. A Rolls-Royce's niche is to satisfy the needs of the discerning super-luxury automotive buyer; it exhibits the best of its niche market and fulfills the consumer's needs flawlessly.