SHANGHAI, China — The global financial crisis has taken its toll on the auto industry worldwide and on the revenues of China's exporters, but there is still wealth in this country, and increasingly, there is the dream of getting behind the wheel of a luxury vehicle. With 51,000 people worth more than 100 million yuan, or $14.7 million, the dream can become reality for some.
That is a heartening sign for Porsche, Rolls-Royce and other high-end automakers that are banking on sustained China sales. Klaus Paur, consultant with the TNS China firm, said the economic slowdown has shown "less spectacular" damage in China than in some of the "traditionally largest markets for luxury-carmakers, in particular the U.S. and Europe." He also said signs of recovery "can already be seen" in China, unlike elsewhere, and called China a "long-term investment into the future."
A good example of the promise China holds for luxury marques is exporter Zhang Qian, the 30ish owner of a toy factory in Wuxi in Zhejiang Province. Zhang drives a BMW 745Li and also owns a Bentley luxury sedan. Last week he was among the 600,000 car enthusiasts who attended the 2009 Shanghai Auto Show, where he expressed interest in the Porsche Panamera that was making its world premiere. It was the first time in Porsche's history that a new model was introduced outside Europe or North America. The car is expected to be priced starting at more than $270,000 in China when it goes on sale in late 2009.
Klaus Berning, executive vice president in charge of Porsche sales and marketing, commented at the time, "Although in operating terms we are set up better than many other manufacturers, we, too, feel the global slump in demand." Speaking at the launch ceremony on the 97th floor of the Shanghai World Financial Center, Berning said, "China is a significant growth market for Porsche." Last year, Porsche delivered 7,600 vehicles to China, a jump of 145 percent from a year earlier, and compared with around 400 units in 2004.
Berning said Porsche expects about a third of its forecast 20,000 Panamera sales a year to come from China and the rest of Asia.
Ferrari expressed equal optimism about the China market at the Shanghai show, where its California was on display. The California will be priced at around $498,000 in China. A company official said sales of Ferrari in China rose 20 percent to 212 last year.
Maserati's GranTurismo S Automatic made its Asia debut at the show, and the Quattroporte Sport GT S made its first appearance in China. Last year, Maserati sold 350 vehicles here, making China the fastest-growing market among the 59 markets it operates in.
Bentley said it sold 15 vehicles, including all of its display models, at Shanghai. Lamborghini said it received more than 10 orders, including one for the LP670SV, priced at more than $1 million, even though buyers will have to wait a year for delivery.
Rolls-Royce unveiled its RR4, or Ghost, in Shanghai, a luxury sedan that may cost more than $586,000 when it is launched at the end of this year. The company said it sold 18 vehicles at the show, including the Ghost.
With sales of 106 cars last year, China was the manufacturer's third-largest market after the U.S. and Britain, surpassing Japan as its major Asian market for the first time. Rolls-Royce Motor Cars Shanghai Director Fire Fung noted, however, that consumers "are demanding higher discounts" in the current economic climate, and he said the company has "held back its plans" to open new dealerships in eastern China to ensure sufficient profits for existing dealers.
Sales of Mercedes-Benz, BMW and Audi slowed from their average 30 percent growth in the second half of last year as even the wealthy curbed their spending, especially in Guangzhou and Shenzhen in Guangdong Province, where many factories have been forced to close. The luxury-car market also has to contend with plans to levy higher taxes on cars with large engines, which will increase their purchase price.
Still, the growing wealth of some Chinese and their desire to flaunt their affluence are both pieces of good news for the world's automakers.
Inside Line says: Aspirational brands meet aspirational buyers. — Vivian Jin, Correspondent
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