China’s luxury car market slows down
Photos posted online of the wreckage of a lime green Lamborghini and red Ferrari that crashed drag racing on the streets of Beijing earlier this month caused outrage, as people questioned who owned the luxury cars. China’s slowest economic growth in a quarter of a century, and the government’s corruption crackdown are having a major negative impact on the sale of luxury cars.
Germany’s Daimler believes it may have hit upon a solution with its new Mercedes-Maybach S600, saying it is understated enough to find a market in the new China. “The Maybach is a really exclusive vehicle but still almost an understatement,” said Hubertus Troska, member of the board of management of Daimler with responsibility for China.We feel like it fits actual Chinese times.”
Rolls Royce Motor Cars parent company BMW Group said it had “adjusted” the production of Rolls-Royce specifically because of slower sales in China, which became apparent last summer. “We have seen some headwinds in the top luxury segment, not only Rolls-Royce but very expensive goods in this country,” said Peter Schwarzenbauer, member of the board of management for BMW who has responsibility for Rolls-Royce. “We adjusted our production because Rolls-Royce is the last brand you want to push: you can’t sell a Rolls-Royce, a Rolls-Royce has to be bought.”
Last year, the Asian giant was Maserati‘s second-largest market as sales of its sports cars — including the Quattroporte, which can cost up to $377,000 — reached 9,400, more than doubling from 2013. But now its chief executive acknowledges it will struggle to even maintain that level this year. “The target this year is to maintain more or less the volumes of last year — a very difficult task” says CEO Harald Wester.
At the same time, the luxury and slightly lower-priced “premium” segment — cars costing under $197,000 — are facing more competition. In the premium segment, traditionally strong German manufacturers are now being pitted against US brands such as General Motors‘ Cadillac and Ford‘s Lincoln. Lincoln, which launched in China only in late 2014, showed off a concept for its Continental sedan at the Shanghai auto show, as well as two SUVs. “This year, next year, China could become the biggest luxury-car market,” Ford CEO Mark Fields confidently predicted.
Analysts said the top-end luxury market might be better placed to ride out the downturn, because premier-segment cars that are favorites for government officials and fleet — such as Audi — are now being targeted by an austerity campaign.
adapted from Business Insider