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Jun
2015

Luxury Cars March 2013

New leaders, new rules, new cars

The two most talked about topics in the automotive sector at this time are the new leadership and the up and coming Shanghai auto show. The former has little direct impact on luxury cars, the second does.

As you will read in other sections of Luxury Insights China, new government policy is impacting us all in some way, and for the international car brands and Audi in particular, new rules related to the vehicles being used by government officials which stipulate that they should be domestic brands will end a 10 plus year dominance of this niche. Soon we will see officials being driven around not in their plush A6L’s or A8L’s, but a 1.8 litre domestically made machine that costs less than 160,000 RMB, and my guess is that they won’t be that happy about it!

On a slight side note, almost all cities in China now have programmes to restrict the number of cars being sold, and hence on the road by restricting the availability of the license plate which in effect belongs to the vehicle. Buying a car does not guarantee you a license plate; you have to bid for this in a monthly lottery. Some commentators now think that this restriction will motivate consumers to trade upwards in terms of vehicle, and will in theory be good for the more highly regarded international brands. For example, rather than buying a domestically made car for 180,000 RMB, I buy a foreign brand for 250,000 RMB because once I have a license plate, getting another will be very difficult.

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Back to the Shanghai auto show

As we have seen over the past three years, auto brands have begun to make these shows in China their priority, and to use them as a platform to introduce new products or demonstrate concept vehicles; something that would have been unheard of five or more years previously. There is a great deal of gossip in the media here about which concept vehicles will be present, and the launches that will be made at the show, none of which we or they are able to substantiate, but here are the claims.

SUV’s

  • The Volkswagen Cross Blue concept car (expected to be in domestic production in 2015)
  • The New Jeep Cherokee (expected to be in domestic production in 2014)
  • The BMW X4 concept car (expected to be imported)
  • The Mercedes-Benz GLA (expected to be a domestic product in future)
  • The Renault Captu (expected to be domestically produced in 2014)

Supercars

  • The BMW 4 Coupe: World debut
  • The Maserati Ghibli: World debut
  • The Ferrari LaFerrari: Asia debut
  • The new Porsche Panamera: World debut
  • The Icona Vulcano: World debut (and the only one in existence)

We will report back in a subsequent Luxury Insights China report, on exactly what was shown at the show, and the technologies and trends on display.

New dealerships

  • 18th Jan, a Porsche dealership opened in Nantong, Jiangsu province.
  • 18th Feb, the 50th Porsche dealership in China opened in Foshan
  • 15th Mar, a Bentley dealership opened in Jinan.
  • 22th Mar, a Ferrari & Maserati store opened in Suzhou, currently the largest in China.
  • 24th Mar, Bentley opened a dealership in Nanchang the capital of Jiangxi province.

As of January 1st 2013, Bentley formally went direct in China and stopped using a master franchisee. In response to growing demand, it expects to open 12 new dealerships in the first half of 2013, most of which will extend to tier two and three cities. By the end of 2013, the number of dealers nationally will reach 40.


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