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Jun
2015

Luxury Cars April 2014

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The Beijing Auto Show

The Beijing Auto show is without doubt the most visited automobile show in the world! Starting on 21st April and lasting for 9 days, it is predicted that over 800,000 people will rush to visit the show during the period. ‘The Automobile makes a better future’ is the main theme for this year’s event, the show covers 230,000 square meters and 118 new models will have their world debut at the show, along with 71 concept cars and 79 new energy vehicles.

Because of the temptation of the growing Chinese market, all the big international manufacturers have headed to China for the show. Some of the company CEOs flew to Beijing to manage the exhibition personally including Alan Roger Mulally, the President and Chief Executive Officer of Ford Motor and Martin Winterkorn, the Chairman of the Board of Management of Volkswagen AG.

The unprecedented attention to the Beijing Auto Show from car manufacturers obviously indicates the perceived value of the China market to the global automobile industry. Although the government regulation related to car ownership and the environmental movement have an affect the performance of the market, the world’s auto giants are confident about the opportunity and continue to invest in China.

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Trends

The new energy car becomes a practical choice

According to the Beijing Auto Show organisers, the domestic Chinese new energy car industry has already created a relatively complete product chain that will enhance the new production capacity and play an important role in the developing competition in the world’s largest new energy car market.

Volkswagen is planning to sell electric cars in China in 2014 and Tesla announced that the company plans to produce the Model S domestically in the next 3-4 years.

With government support, the Chinese new energy vehicle market may develop rapidly and become very competitive.

Auto-drive technology: a boon in China

Auto-drive technology has been discussed in the industry for a long time, but at this show, it is the first time that all the international car companies have focused on it. At the show Show, Audi, BMW, and Volvo all presented their auto-drive technology and claimed that they will apply it to their volume production cars.

Naturally, this novel idea has attracted attention from Chinese consumers. Automatic parking technology is the practical application of auto-drive, which is fairly popular in China as the number of Chinese drivers increased rapidly, but many are inexperienced and lack driving skills. Due to this particular fact, car models with automatic parking technology sold fairly well in 2013 and the trend may continue in 2014.

Big Data changes the rules of the industry

Rumors that Samsung and Chinese mobile company MI will make their own new energy cars indicates that in the era of Big Data vehicle production thresholds have been greatly reduced, greater involvement of IT companies who specializes in Big Data will undoubtedly change the automobile industry. Similarly, in the era of Big Data, consumer purchase behavior and preferences will also change as manufacturers who can meet consumer demands and provide a better experience will be able to gain a market advantage. Currently the smash hit brand Tesla is a good example. The company was an unknown until recently, but with the strong integration capabilities, it has become a new star of the industry.

Traditional auto brands collaboration with the IT industry

Before the Beijing show, Shanghai GM, Shanghai Volkswagen and Shanghai Automotive Industry Corp. cooperated to launch the SAIC e-commerce website ‘Chexiang’, which is considered as the first step for auto companies into the e-commerce business. Following this trend, the show organizers introduced some Internet of Vehicle (IOV) exhibitors to demonstrate China’s current smart auto industry.

Currently the IOV industry is still in the development stage. SAIC, GM, Toyota, DS and other brands have launched their own automated call centre for car owners to provide information in terms of navigation, catering, refueling, safety, weather conditions, traffic notification and general news broadcasts.

With the technique developing in China, more and more new cars will be equipped with IOV systems as the era of car brands cooperating with IT companies has arrived.

Affordable supercars

The launch of the Maserati Ghibli and Tesla Model S in China in 2013 were two of the top 10 automobile news that year for many supercar fans. What’s makes these launches attractive and interesting is the price of the product, nearly 800,000 RMB to have a Maserati or Tesla is unexpected. Although the price may still be expensive in the eyes of foreign consumers, this is China where the same level of Maserati and Tesla would have cost millions in the past. During the 2014 Beijing Auto Show, the trend continued as Porsche China announced the Macan S priced at only 688,000 RMB, where Bentley are selling the Flying Spur V8 for 3.2 Million RMB.

Thus, the pricing pattern of expensive imported luxury cars into China may be broken soon, and perhaps it may be possible to gradually reduce prices for international brands in the future.

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Rich Chinese are always drawn to the top super cars of the world.

The annual auto show is always a showroom for the worlds top luxury cars, and also an opportunity for the wealthy to purchase their favorite limited edition vehicles. Regardless of how the domestic policy changes or whether the economy is good or bad, Chinese ‘Tuhao’ (who are notorious for their glitzy taste and a penchant for spending lots of money) always catch everybody’s attention with their strong purchasing power.

Koenigsegg One:1

Estimated retail price: 100 Million RMB
Sales status: Sold out
At the 2014 Beijing International Auto Show, Koenigsegg One:1 supercar officially debut in China. The company confirmed that the One:1 has a limited production in 6 of which 5 were brought to China this month. Unexpectedly all 5 cars were sold to Chinese mystery buyers, and again unexpectedly the cars were all sold on the first day of the show!

Bugatti Black Bess Limited Edition

Estimated price: 40 Million RMB
Sales status: 1 left
On 19th April 2014, Bugatti held the world debut the Black Bess Legend limited edition. This is the 5th Bugatti world’s legend limited model and the manufacturer produced only 3 in total. The price of the car is € 2.15 million in Europe, but by the time it is landed in China and shipping, tariffs and other fees are included, the car will cost a wealthy buyer nearly 40 million RMB. Bugatti shipped all 3 Black Bess limited editions to Beijing and on the first day of event they sold 2.

Porsche 918 Spyder

Price: 13.388 – 14.635 Million RMB
Sales status: 50% sold
Porsche brought a variety of models to the Beijing Auto Show, including the Porsche 918 Spyder Standard Edition which has an entry level price of 13.388 million RMB.

At the 2013 Guangzhou Auto Show, the Porsche 918 had its debut. The car is limited to a production run of 918 units. Having been launched, the Porsche 918 has become sought after by Porsche fans worldwide. More than 50% of the vehicle production has been ordered.
The cars order so far will deliver in 2015, but some Chinese buyers made appointments to test drive a 918 Spyder model in Leipzig before theirs is ready.

Debut’s at the Beijing Auto Show

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