China Truly Craves for Auto Luxury

by : Gertrude

China's automotive industry continues to crave for luxury cars.

Ian Robertson, Chairman of Rolls-Royce Motor Cars, a part of BMW told Reuters on the eve of the Shanghai Auto Show that the excitement of the Chinese customers is the pleasure of waiting to get that unique car tailor-made for them. Roberts sees the automotive industry as the most powerfully growing market in the world.

With 60 present China sales increases last year, Rolls-Royce will add two new dealerships in China in the coming year for a total of seven. This makes their network second only to the United States.

Rolls-Royce recently sold a $US2.3 million car in China that included rear-facing seats and drop-down flat-panel TV screens.

According to a survey compiled by Rupert Hoogewerf, who pioneered a list for Forbes Magazine, the number of billionaires in China doubled to 15 percent in 2006. It showed that there are several hundred thousand millionaires, too, triggering a stampede to China by global luxury carmakers.

China's list is headed by Cheung Yan, founder and chairwoman of paper packaging firm Nine Dragons Paper Holdings. Her assets rose to US$3.4 billion boosted by an initial public offer of shares in Hong Kong.

Bibiana Boerio, the Managing Director of Ford Motor Company's Jaguar brand in China said these people don not want to drive what everybody else drives. They want their exclusivity.

The Jaguar group, however, is becoming less exclusive, as Jaguar sold 1,012 cars in China last year, up 58 per cent and doubles the pace of growth for the overall car market in China.

The Chinese are buying an average of 15,000 luxury cars each month, and that rate is accelerating as newer models are launched and more automakers target the newly affluent. Toyota Motor Corporation, Honda Motor Company. and Nissan Motor Company, the three big Japanese rivals, have all joined the charge, launching their Lexus, Acura and Infiniti luxury brands into a market sector that could be worth around $10 billion.

China's economic growth for the first-quarter was above 11 per cent and the country's main stock index soared 130 per cent last year, making it the world's top major performer.Such growth has made people more opulent. It therefore made a broad range of cars more affordable. As an effect, fast-rising, technology savvy young professionals hunger for speed and luxury.

Boerio said Women bought 30-40 per cent of Jaguar's S-Type, a higher percentage than other markets in the world. She added that such sales say something about the confidence of Chinese women.

Jaguar's highest priced car retails for about 1.52 million Yuan. That is about 100 times the annual income for the average Chinese.

Growth in China's super-luxury sector has outpaced sales of the top-end models offered by BMW and DaimlerChrysler's Mercedes-Benz. Stuart McCullough, a board member of Bentley Motors, owned by Germany's Volkswagen, said the only limitation is the imagination. Bentley sales in China doubled last year and are still expected to double again this year to around 250 of the hand-crafted status symbol for the world's elite.

The firm has a pretty good projection of what sales will be this year as there is a waiting list of 18 months to two years, depending on the model.

But it is not that easy to make a deal on a Bentley. McCullough said the only person in the world who gets a deal on a Bentley is the Queen of England, whose cars can cost as much as 13 million Yuan.

China has always been one of the countries with highest car sales due to its extensive car plants, shops, and dealers.