'In the first five months of 2011, the sales of Mercedes-Benz rose by more than 70 per cent in China,' Huang said.

The sales of Japanese cars declined for two months after the March earthquake and tsunami, due to a shortage in supply, according to Huang. 'Now manufacturing has been resumed to the level before the earthquake and overall our business won't be affected by the event.'

He added that Zhongsheng was in negotiations to introduce one or two more European luxury brands into its company portfolio this year. In 2010, it began selling Porsche and Lamborghini.

'To sell Lamborghini is an issue of image and we don't expect to sell many of them,' Huang said.

'But the demand for Porsche is very strong and clients have to wait for half a year to get their hands on a Cayenne after buying it.

'The limit on car purchases has no impact on us. The main problem for our clients is to get their car,' he said.

Haitong Research said in a report yesterday that the regulations limiting car purchases in some cities, including Beijing, were unlikely to be removed in the near future. However, the capital may implement plans to subsidise drivers who want to replace their existing cars with new ones.

Huang said once the government issued clearer regulations on the second-hand car market, especially regarding taxes, it would become a new growth area for it.

'In a mature market, second-hand car deals contribute 20 to 30 per cent to revenue,' Huang said. 'Right now, their contribution is negligible in China.'

He believed that once second-hand car sales gear up, Zhongsheng would be in a good position because of its focus on the high-end market.

The company has planned to set up 40 more dealerships in China this year, doubling its number of showrooms. Huang said that so far they had opened 10 new showrooms and another 10 were under construction.

6

That is the number of months a mainland customer may have to wait between paying for his new Porsche and delivery