Luxury Cars Move Off in China

SHANGHAI, China — Competition among luxury car brands in China is heating up, with the latest signal of exciting times being the opening of Porsche AG's new showroom in Shanghai last week. Porsche Center Shanghai is now near People's Square, facing the showrooms of Ferrari and Mercedes-Benz.

Although the European luxury brands cover different price ranges, they all have the growing numbers of affluent Chinese customers in their sights.
According to a survey by HSBC, the number of China's middle class, aged between 20 and 49 with annual incomes between $8,000 and $27,000, will reach 100 million by 2016, up from 35 million last year. Meanwhile, the nation has recorded growth of more than 10 percent annually in gross domestic product over the past few years and has created more than 300,000 millionaires in U.S.-dollar terms. Based on the latest "rich list" made public in China, more than 500 people had assets of more than $100 million.

The luxury-car market in China is not showing signs of slowing. It is expected to grow 20 percent annually until 2008 and then at 10 percent per year until 2015, according to Ernst & Young.

The growth of China's luxury-car market took the world's automakers by surprise, but by now they see the mainland as a driving force in their global sales. Porsche, Maserati, Ferrari, Bentley and Rolls-Royce have all boosted their China sales significantly over the past few years.

Sales of Porsche in China, which has 18 dealers nationwide, may hit 4,000 units this year compared with 2,305 units last year, sealing its leading market position. Ferrari has a target to sell 160 cars on the Chinese mainland this year, a rise of 33 percent from a year earlier. Bentley has doubled its sales in China over the past two years after a five-year buildup. It received orders for 400 cars on the mainland this year, of which 250 will be delivered.

Newcomers including Aston Martin, Lamborghini and Spyker are all vying for new customers by taking part in auto shows.

Rolls-Royce just introduced its Phantom Drophead Coupe, a two-door, four-seat convertible, in China, priced at $850,000. The model joins the Rolls-Royce Phantom and Phantom Extended Wheelbase here. The carmaker plans to add two more showrooms in China this year in addition to the existing five dealerships.

Aston Martin, which just opened its first showroom in Shanghai, plans to set aside 50 cars for the Chinese market before February 2008. During 2008, more than 150 units will be shipped to meet demand — a rare order for the purely handmade products.

Jean Todt, chief executive officer of Ferrari, said the 430 Scuderia will be available within six to eight months after ordering when it begins selling in China next year, compared with a 12-month waiting period for earlier models. Meanwhile, Ferrari has launched a Chinese version of its Web site to provide easier access to information about the company and its products.

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