Luxury carmakers cashing in on China

Updated: 2011-06-17 11:13

By Patrick Whiteley and Wang Chao (China Daily European Weekly)

Twitter Facebook Myspace Yahoo! Linkedin Mixx


Luxury carmakers cashing in on China
Klaus Maier, president and CEO of Mercedes-Benz (China), says the company expects to sell 300,000 units of Mercedes-Benz, Smart, Maybach and AMG cars in China by 2015. [Provided to China Daily]

Automobili Lamborghini China has achieved stunning sales results since the 2005 opening of its first dealership in Beijing when it sold 10 vehicles.

Last year, 206 Lamborghini models were delivered representing a 150 percent year-on-year growth and large percentage of the 1,302 units it sold worldwide.

Christian Mastro, general manager of the company's Asia Pacific operations expects to sell more than 300 units in China this year thanks to the growth of nation's young millionaires.

"Chinese Lamborghini owners are usually 10 years younger (25-35) than European and American users (35-45). They are also fans of super sports cars and they are very rich, some of them being successful entrepreneurs," he says.

British carmaker Bentley was another Shanghai show winner selling 60 models at the expo, mainly for 4 million yuan each. It anticipates China to soon become its biggest market worldwide.

Wolfgang Durheimer, Bentley's chairman and chief executive, says the company's 2010 China sales almost doubled from 2009 to nearly 1,000 units, as it then became the carmaker's third-biggest market.

Last year, Porche celebrated its 10th anniversary and 50,000 owners in the Chinese mainland. In 2010, is sold more than 13,800 cars, an annual growth of 60 percent.

The company has already moved more than 7,200 cars in the first quarter of 2011, and CEO Helmut Broeker expects China sales to surpass 20,000 units this year.

Broeker says the company's true sales success began in 2006 with the second-generation Cayenne SUV. Last year, Cayennes represented 60 percent of the brands sales, making China the largest market worldwide for the model.

Such brisk Cayenne sales moved China to the second spot in Porsche's international markets, following only the United States.

"I would expect that in 2014 at the latest - when our new, small SUV is launched- China will reach the No. 1 position," Broeker says.

The boom in high-end SUVs, such as the imported Porshe Cayenne, is a major contributor to sales rise of luxury vehicles according to automotive research firm, Fourin, which reveals some telling figures.

The largest portion of the imported cars, some 34.6 percent, cost more than 500,000 yuan; more than half the buyers of imported cars in China were young, rich men; 88.3 percent used cash; and men in their 30s and below accounted for 55 percent of the total, making China's luxury-car purchase group the world's youngest.

One of the most exclusive imported cars is Rolls-Royce, which last year named China as its second largest market in the world, placing the UK in third place. In the first five months of 2011, Rolls-Royce sold 678 cars, a massive 146 percent increase year-on-year.


Luxury carmakers cashing in on China

Luxury carmakers cashing in on China

"It will only be a matter of time before the market becomes the largest market in the world for the company," says Jenny Zheng, general manager of Rolls Royce Greater China. "But we have no plans yet to increase factory capacity volume is not the main consideration as there is a need to retain exclusivity with the brand."

Audi imports only 15 percent of its products into China, and now has an annual production capacity of 200,000 units at its joint venture with parent Volkswagen Group and local partner FAW Group. It plans to double this figure as it aims to move 1 million cars in total from 2011 to 2013.

The luxury car unit of Volkswagen was the first top-end car in China when it arrived in 1988 and its black sedan variety quickly became the No. 1 ride for government officials adding power and prestige to the brand.

As a result, it continues to be the biggest-selling luxury car in the country selling 23,800 cars in May, up 22 percent over the same period last year.

Last year, Audi sold 1,092,411 cars globally with sales in German representing 21 percent, and China close behind with 20.9 percent.

Dominique Boesch, president of FAW-VW Audi sales division, says the demand in China has caused brands to be localized.

"The company introduced a climate-controlled cup-holder in its Q5 crossover vehicle, designed for government officials and executives who tend to carry cups of tea in the car," Boesch says.

"Customers love driving our extended versions and for this reason, the extended version of the A6 is only found in China."

Recently, Audi's German headquarters sent three senior designers to work in China for two years. They have been ordered to dive into the Chinese culture, communicate with artists, and make the aesthetic design more Chinese.

Fellow German carmaker, BMW, is also riding the sales tsunami and in May, sold 21,150 cars in China, a year-on-year increase of 51 percent. China is now BMW's third-largest market following Germany and the US.

To cater for this demand, the BMW Group says it will almost double the investment in its second factory, in North East China to around 1 billion euros to enable higher production and increased local content.

With its joint venture partner Brilliance Auto, the factory will have an initial capacity of 100,000 cars a year when it is completed early next year.

"We have never before built a plant in such a short time - 18 months," says Olaf Kastner, president and CEO of the joint venture BMW Brilliance Automotive.

BMW's existing factory in Shenyang makes about 75,000 3 Series and 5 Series sedans annually. This is set to increase to more than 100,000 in the near future and over the long term, the two plants can roll out 300,000 vehicles a year.


My China story

Foreign readers are invited to share your China stories.


Though Elisabeth Koch did not attend the Aprilweddingof Prince William and Kate Middleton in London, her tailor-made hats might have.

Mom’s the word

Italian expat struggles with learning English and experiences the joys of motherhood again.

Suzhou: Heaven on Earth
The sky's the limit
Diving into history