Carmakers pin hopes on sales of luxury brands
Local and foreign carmakers in the country are pinning their hopes on resilient sales in the luxury segment to help cushion an expected fall in overall demand for cars in the domestic market this year.
The strategy reflects on the dominance of luxury models on display at Auto Shanghai 2009, the annual car show that opened on April 20 and runs until tomorrow.
High-end manufacturers such as Porsche, Rolls-Royce, Ferrari, Daimler-Benz and BMW are showcasing new models in the pipeline including the Rolls-Royce Ghost, which will only go into production later this year, the Ferrari California and the S-series from Mercedes-AMG, most of which will be rolled out by next year.
For some, the strategy has already paid off and premium brand Bentley said it had sold eight models priced i between 3.68 million yuan (HK$4.18 million) and 5.88 million yuan. Bentley brought three Continental models to the show and its most expensive model was sold out on the first day.
Porsche reported that it had received 19 orders for its Panamera within the first 30 minutes of the show's opening.
'China is an important market as it recorded significant growth over the past five years,' said Rolls-Royce chief executive Tom Purves. 'But 2009 will be a year that shows only stable growth because the economic situation is tough.'
Rolls-Royce sold three cars on the mainland in 2003 but last year this rose to 100 sales.
'The affluent consumers' propensity to spend has indeed been affected by the global financial crisis,' said former luxury car sales agent Kenneth Tsang Yu-kit.
'But in the long run, China will remain in the spotlight and carmakers are planning ahead to grab consumers by building branding strategies.'
Mr Purves said the mainland car market was affected by the economic downturn but the nation's capital, Beijing, was ranked as one of the top three company dealerships in the world last year. 'In terms of sales volume, the mainland is also catching up with Hong Kong, which used to be an important market for luxury brands,' he said.
Shanghai's Hurun Report magazine says the mainland is now home to 51,000 people with more than 100 million yuan in net worth.
'Although unachievable for most car buyers, these luxury brands have an extremely aspirational character for Chinese consumers,' said Klaus Paur, a director for car research in China at consulting firm TNS.
'For many young, well-situated and rich people, a car is to a very high degree a representation of status,' he said, quoting the 2.5 million yuan Porsche Panamera as an example.
'Luxury brands are literally their dream cars.'
Moving up
The number of Rolls-Royces sold last year on the mainland: 100
