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Luxury marques expect strong sales on mainland

By Juwai, 01 May 2012
Economic slowdown may have affected appetite but market for premium brands seen as buoyant and may overtake the US. Anita Lam reports for South China Morning Post. April 30, 2012 -- Mainland appetite for new cars may have been dented in the past few months by the economic slowdown but premium models continue to bet big on it. Bentley, for example, expects China to surpass the United States as its biggest market this year while Rolls-Royce forecasts another record year of sales, with the mainland market delivering double-digit growth. IHS Automotive expects sales of premium cars to jump 139 per cent to 1.75 million units in 2015 from 2010, but expects the growth rate to slow to about 29 per cent in the five years to 2020. That compares with a projected increase of 38.42 per cent for passenger cars between 2010 and 2015. Zhu Bin, a Shanghai-based analyst of IHS Automotive, said in a research report niche luxury brands would eventually steal market share from mass luxury car makers such as Audi and BMW as more buyers opted to buy fancier cars. "Chinese consumers are looking for that 'wow' factor. Unique [design] plays a key role in purchasing decisions as a luxury brand car is now one of the social symbols to show wealth, status and highlight individual personalities," Zhu said, adding that mass luxury sellers would increasingly need to find the right balance between sales volume and maintaining exclusivity. Luxury car sales jumped 22 per cent in the first quarter of this year while passenger car sales dropped 3.4 per cent, but the jump came at a heavy price for manufacturers and dealers. One car dealer, who refused to be named, said that in trying to catch up with its rivals such as Audi and BMW, Mercedes in February offered up to 400,000 yuan (HK$494,000) in discounts on its S-series cars that cost between 900,000 yuan and 2 million yuan. Dealers had to shoulder half of that incentive. But Torsten Muller-Otvos, the chief executive of Rolls-Royce, said the company did not offer discounts. "We give no discounts, every car of ours is tailor-made, they are so unique, they are like fingerprints." Presenting the new Phantom II extended wheelbase model in Beijing's car show, which ends on Wednesday, Muller-Otvos expects another record year of sales, although Rolls-Royce dealers said first-quarter sales on the mainland were slower than usual. "I see growth worldwide, with economic recovery," said Muller-Otvos. "Middle East was bullish in the first three months, Russia's growing very well while Europe is a mixture. Italy, Spain and Portugal are shaky while Germany, France and UK are still okay." Rolls-Royce sold a record 3,538 units last year, 1,000 of it in China, making it the company's biggest market for the first time in history. Wolfgang Durheimer, the chairman and chief executive of Bentley, which saw sales surge 84 per cent to 1,839 units on the mainland last year, said China could take over from the US to become its biggest market this year. "It may not be possible to maintain an 84 per cent growth rate this year but the China market will see double-digit growth." By launching sport utility concept car EXP9F at the Beijing show, Bentley is aiming at the fast-growing SUV market not just in China but US and Europe as well. It is also moving inland to expand its dealership network on the mainland. On May 6, it will open a dealer in Ordos, Inner Mongolia. The company is also considering venturing into other third-tier markets such as Harbin, Ningbo, Changsha and Tangshan.
标签: luxury, china