Luxury Car Makers Have an Eye on China's Highly Affluent

Luxury cars like Rolls Royce and the fastest ever Ferrari road car entered Beijing on Friday targeting the super-rich consumers.

Rolls Royce sold two models -- the more expensive of the two bearing a price tag of nine million yuan (1.3 million dollars) -- in the first few hours of the Beijing Auto Show, where nearly 1,000 vehicles have gone on display.

"Chinese are hard-working and they like to reward themselves, and the pinnacle product to reward yourself with is a Rolls Royce," said Paul Harris, the carmaker's Asian regional director.

But rich Chinese will be disappointed if they had hoped to get their hands on one of the limited edition 599 GTO Ferraris at the show.

The legendary Italian sports car maker has made just 599 of the cars, which can reach 335 kilometres per hour (200 miles per hour) -- making it Ferrari's fastest consumer car.

All of the cars, whose price tag Ferrari will not publicly divulge, have already been sold, including 20 in China, said Amedeo Felisa, the company's chief executive.

Luxury car sales in China have soared in recent years to become one of the fastest-growing segments of a market that sped past the United States in 2009 to become the world's biggest.

Advertisement

Automakers sold 13.64 million vehicles last year as increasingly well-off Chinese consumers continued to snap up cars, helped by government incentives such as lower taxes.

"A lot of people are getting rich very, very quickly and they are willing to spend on the most luxurious goods, whether that is watches or luxury cars," said Raymond Tsang of consulting firm Bain & Company.

Advertisement

China has the second-highest number of dollar billionaires in the world after the United States, according to Forbes magazine, and luxury carmakers say they expect strong sales growth in the years ahead.

British sports carmaker Aston Martin entered China in 2007 and said sales were so strong it would become its top market in Asia in 18 months.

"It's the fastest-growth market for us and it has the biggest potential," said Matthew Bennett, Aston Martin regional director.

"These are car enthusiasts who love to drive, which is a very select group of people in China. They love the car, they love the brand and they like to drive."

Rolls Royce, which has made an extra-long vehicle for the "chauffeur driven" Chinese market, said it expects sales to more than triple in 2010 to 300-400 cars, making China its number-two market in the world.

Its customers were "phenomenally successful" entrepreneurs who sometimes pay for the luxury cars in cash.

"Two months ago a customer came in with cash in the back of the car," said a Rolls Royce marketing executive based in Chengdu.

"People want to buy something to show their wealth."

The Chinese market has been a saviour for foreign carmakers as sales in developed countries slumped during the financial crisis and remain sluggish.

Ferrari, which sold more than 200 cars in China last year, said the Beijing launch of the 599 GTO underlined the importance of the Chinese market to its brand.

"For us, China is very important in our strategy, especially for the future," chief executive Felisa said.

"This region is one where we continue to evolve and develop our product."

The auto show, covering an area equivalent to nearly 40 football pitches, also features 65 concept cars and 95 alternative-energy vehicles.

The exhibition opens to industry participants on Sunday but media were given a sneak preview of the line-up on Friday.

Source-AFP
SAV