BEIJING: Free-spending new rich and young entrepreneurs have made China a key growth market for luxury car makers as the traditional Western markets continue to languish.
Nothing personifies this as much as the exhibits at the ongoing Beijing auto show, with over 90 percent of the high-priced wheels finding eager buyers in spite of the models being priced in excess of 1 million yuan.
A model stands beside a Bugatti Veyron 16.4 Grand Sport at the ongoing Beijing Auto Show. [Feng Li/For China Daily]
The hottest deals have been the 40-million-yuan forked out for a Bugatti Veyron super sports car and the 10-million-yuan for a black Rolls Royce Phantom Extended Wheelbase Edition.
"China's super car market is growing faster than our expectations, while the Western markets are declining," said Stephan Winkelmann, president and CEO of Italian super sports car producer Automobili Lamborghini SpA.
"The strong demand will soon make China our second biggest market after the United States. If the high taxes on luxury cars are removed, China could very well become the biggest market."
Lamborghini has launched a special edition Murcilago LP 670-4 SuperVeloce at the auto show, designed and manufactured exclusively for Chinese super sports car enthusiasts. Limited to only 10 cars worldwide, Lamborghini has already received orders for the 8-million-yuan-plus car from young customers here.
In 2009, Lamborghini delivered 80 new vehicles to China, up 11 percent from a year earlier. Winkelmann said the company expects sales to surpass 100 units this year.
"Chinese entrepreneurs have been very successful in the past few years as economic growth remained strong in the nation," said Paul Harris, Asia-Pacific regional director for Rolls Royce.
"Although we have loyal clientele from celebrities and hotels, young Chinese entrepreneurs are also now major customers," he said.
According to Harris, China would soon become Rolls Royce's second largest market, with sales likely to touch 300 to 400 units this year.
"We sold around 100 cars last year, but we have already received more than 250 orders in the first four months of this year," said Harris. "China accounts for 15 to 20 percent of our global market."
He attributed the surging orders to the Rolls Royce Ghost model launched last year. The Ghost is a smaller car targeted at the younger market.
Both the officials said the average Chinese customers are far younger than the global average. "It's interesting to note that our clients in China are 15 to 20 years younger," said Harris.
"As the fastest growing automotive luxury brand in China, we have an equally strong vision for the future. Nowhere is the potential and possibility of the future more apparent than in China," said Joachim Schmidt, executive vice-president of sales and marketing for Mercedes-Benz Cars.
He said China is the second biggest market after the US for its high-end brand Maybach.
"China will become the world's biggest luxury market in five to seven years. Today there are 130 dollar billionaires in China. Five years ago there were just three," said Schmidt.
According to the latest Forbes list of rich people, there are now more billionaires in China than any other country besides the US.
The Hurun rich report said China has 825,000 residents with a net worth of more than 10 million yuan each.
Sensing the potential, Spyker Cars NV, the Dutch luxury sports car maker, is also scouting for business opportunities in China. It signed agreements during the auto show with China Automobile Trading Co, one of the country's major auto importers, to establish a joint venture for distributing its new generation cars in the country.
Victor Muller, CEO of Spyker Cars, expressed confidence that China's luxury car market would continue to grow and his company would find its niche.