Italian collection

A blaze of color roars quickly by, a Lamborghini hurling down a Chinese highway. No, it's not another Hollywood production of Mission Impossible or other highbudget action fl ick being fi lmed - the outrageous Italian sports car has arrived for real.

Stephan Winkelmann

Although it's not an everyday scene, Stephan Winkelmann, president and CEO of Automobili Lamborghini is targeting China as the best market in which to expand the company's business in the coming years.

"We are expecting the highest growth in the Chinese market," says Winkelmann. "Chinese sports car enthusiasts are sensitive and looking forward to a high-quality vehicle with a pure Italian origin."

Lamborghini, originally a purely Italian company, is now a subsidiary of the German luxury car manufacturer, Audi AG, which is in turn a subsidiary of Volkswagen Group.

Originally unveiled at the 2004 Beijing Auto Show and with its the fi rst sales dealership in Shanghai in November 2005, the annual sales of the several million yuan Lamborghini has been only about 20. However, Winkelmann is obviously satisfi ed with that.

"We actually want to develop gradually, but the growth has been very fast last year. So we expect to double our sales in 2008," he says.

Although China is still an emerging market for Lamborghini, Winkelmann hopes the market can be in the top fi ve for sales at the end of this year, overcoming Japan and following the United States, Germany, the United Kingdom and Italy.

Lamborghini has only three sales outlets in Shanghai, Beijing and Guangzhou. "We have a very clear understanding of ourselves and our positioning in the market. As a super sports car producer as well as luxury provider, we take growth and potential carefully," says Winkelmann.

Also from Italy, high-end Ferrari sold 177 of its sports cars in China after entering the marketplace 15 years ago. It now has 13 dealerships in ten cities. It hopes to increase its sales to 190 cars this year and expects China to be its fi fth biggest market in the next fi ve to six years.

Porsche was the winner of the European sports car sales race in the Chinese mainland last year, with a sales of 650 autos, 51 percent contributed by its classic 911 series. It will expand its distribution network from the current 19 to 30 at the end of this year.

However, to Winkelmann, "Lamborghini has no competitor". He declines to compare his cars with other posh competitors.

With the price at least 10 to 15 percent higher than Ferrari and a sharp focus on manufacturing, Lamborghini's scale, distribution network and production capability are relatively small.

"For a premier brand such as Lamborghini, we have to balance brand value, production volume, sales and profi t. So we won't expand so fast in China," says Winkelmann. "We are considering adding one distribution center in China this year."

However, he promises Lamborghini will continue to bring its latest models to China, even the limited editions.

"We will launch a Chinese version of our Lamborghini magazine this September, the fourth language edition after English, German and Italian, to show China's signifi cance to Lamborghini as well our attention to the market and Chinese customers."

As with the other language versions, he says the magazine will be delivered to 5,000 customers twice a year.

Targeting the nouveau riche

China's growing upper class is a primary reason for Winkelmann's confi dence.

According to Zhong Gang, organizer of Top Marques Shanghai, an annual luxury exhibition in China, there are about 300,000 to 400,000 nouveau riche on the Chinese mainland, with net assets of at least stand 500 million euros ($793.7 million).

The statistics from the Boston Consulting Group also show that by 2006 there were 310,000 Chinese families with million-dollar assets making China the fi fth in the world, behind the US, Japan, the UK and Germany. And predictions say the number will increase by 20 percent every year and reach 6.4 million in 2011.

A report from the consulting firm Ernst &Young said that luxury sedan sales in 2006 in China totaled $2 billion. And it predicts that the luxury auto segment will boom 20 percent this year and by 2015, the sales will reach $11.5 billion.

"The nouveau riche in China aren't using money to show off their wealth," Zhong maintains. "The young rich are well-educated, with individual consumer tastes and eager to experience the deep culture of the luxury."

Winkelmann is targeting them.

"A Lamborghini customer must understand our culture and love the brand," he says.

"More than 80 percent of our fans are males, with successful careers, enthusiasm for European luxury and a strong loyalty to Lamborghini brand. In Europe, the average age of our buyers is over 40, while in the US they are between 30 and 40," says the CEO. "However, in Asia-Pacific region, some of our customers are younger than 30."

A CEO fi ts the brand

Lamborghini's wild bull logo is an icon for sports car enthusiasts; however, few people know the origin of the raging bull and the inimitable roadsters.

Its founder Ferruccio Lamborghini was originally a tractor manufacturer and a sports car fan. According to company lore, when he went to a Ferrari factory to complain about the quality of the clutch in his Ferrari 250 GT, he was told to go drive his tractors because he was unfi t to drive sports cars.

Furious with Ferrari's arrogant and aloof manner, Lamborghini promised himself he would never own another Ferrari, and would beat Ferrari at its own game by creating a superior sports car with the highest speed and excellent performance.

Born under the sign of the Taurus, Ferruccio Lamborghini used the bull as the badge to mark his new automobile, which was introduced at the 1963 Turin Auto Show.

Soon, the V12 equipped Lamborghini was a favorite of sports car enthusiast throughout Europe and the US. However, the 1970s oil crisis plagued their sales and in 1978, Lamborghini declared bankruptcy. The company was bought by the Swiss-based Mimran brothers, Chrysler Corp, an Indonesian investment group, and finally by German Audi AG in 1998.

Under Winkelmann's stewardship as CEO in 2005, sales grew from 1,600 in 2005 to 2,580 last year, partially due to a modernized massmodel production line that greatly lowers the cost.

Before its offi cial launch in China, a smuggled Lamborghini was hyped at 10 million yuan on the black market. However, for only 3 million yuan one can now drive a legal Gallardo (or a Murcielago for 4.58 million yuan) home from the showroom.

(China Daily 04/28/2008 page7)