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The Rolls-Royce Ghost, which was made in 1939, is shown at the 2012 Wuhan Motor Show in Wuhan, Hubei province, on Oct 13. Zhou Guoqiang / For China Daily
China market is the best route for makers of expensive vehicles who want to rev up profits
"You could never imagine how important the China market is to Bentley," said Nigel Lofkin, factory tour guide and former leather trimmer in the British premium brand's Crewe headquarters.
"Of the eight Bentley Mulsanne Grand Tourers we produce today, six are going to China. The other two were booked by customers from the UK and Saudi Arabia," Lofkin, who has been working for Bentley for 33 years, told China Daily.
However, China's new rich sports-car enthusiasts favor more Bentley's other model, the Continental GT, a two-door grand touring coupe, which hit the market in 2003.
"The Continental GT follows the racing heritage of Bentley. Bentley won four consecutive victories at Le Mans (1927-30) and the Continental GT helped boost our business in China. In the first quarter in 2012, China overtook the United States to be Bentley's largest market," said Lofkin.
The British brand in January announced a global year-on-year growth of 22 percent in 2012 as deliveries to customers increased to 8,510 cars.
Though the US finished 2012 as Bentley's largest market with sales of 2,457 units, a 22 percent increase, China reported a 23 percent increase on the previous year, delivering Bentley's largest-ever sales volume of 2,253 units in the region.
In 2012, four of the 10 Bentley Mulsanne Tourers were purchased by Chinese customers. Seeing the enthusiasm from China, the British brand even debuted its limited edition Royal Diamond Jubilee Mulsanne in April in Beijing, to celebrate the 60th anniversary of Queen Elizabeth's ascent to the British throne. The 60 limited editions were well received by Chinese consumers.
"Actually, in my heart, China is the most important market for Bentley now and in the future," said Lofkin.
"The increasing demand will probably drive China to become Bentley's largest market in 2013," he added.
But the French also know a thing or two about style.
The Rolls-Royce Phantom 2013 logo and a model. The car was displayed at Wujiaba Airport in Kunming, Yunnan province, on Nov 29. Yang Zheng / For China Daily
Also owned by German vehicle conglomerate Volkswagen AG, the French ultra-super sports car brand Bugatti said it sold six sports cars in China in the first three quarters of 2012, a sales record for the brand in the world's largest automobile market.
The vehicles included the Veyron Grand Sport Vitesse, which made its Asian debut at the Beijing auto show, and the Veyron Super Sport, the fastest street-legal production car in the world with a top speed of 431.1 km per hour.
"Chinese always want the best, and this gives us a bright future," said Franco Utzeri, sales director of the French brand.
Utzeri told China Daily that Bugatti is planning a strategy for the China market, with a preliminary target of expanding its dealership to 15, from two in Beijing and Hong Kong, by 2015.
Recognized by Chinese luxury consumers as the world's most expensive cars, Bugatti's name made headlines in Beijing and Shanghai auto shows in recent years.
Expense seemed no problem for buyers as the car, with an astronomical price tag, always sold out on the first day.
However, Bugatti's position may be challenged this year as Swedish manufacturer Koenigsegg hopes to tickle the fancy of Chinese buyers with its $2 million One:1 concept.
Limited to just five units, it has received its first order from its dealership in Shanghai.
Other brands are also making inroads.
Rolls-Royce, a favorite of the British royal family, saw around 30 percent of its sales coming from the Chinese mainland, its second-largest market in 2012.
Chief executive officer Torsten Muller-Otvos told China Daily in January that the exclusive brand sold 3,575 cars in 2012 worldwide, in its third consecutive year of record sales.
During 2012, its two dealerships in Beijing and Shanghai were listed among the top three worldwide in terms of sales for the second year running.
Although the US still remained its biggest market, the sales gap between it and China was very close, almost on a par, said Muller-Otvos.
"Sales in the Chinese mainland are now only around 40 to 50 units behind those in the US. And almost one out of every four cars was sold to China in 2012.
"We are cautiously optimistic about our business in China in 2013, and I would not be surprised to see China as our No 1 market this year," he added.
Italian brand Lamborghini delivered 320 cars to Chinese customers in 2012.
"Though our sales growth in China in 2012 was a little quiet from the boom in past years, we see huge potential," said Christian Mastro, general manager of the Italian "Raging Bull" brand in the Asia-Pacific.
After enjoying a 150 percent surge in year-on-year sales in 2010, and a 70 percent rise in growth in 2011, Mastro insists the future of Lamborghini in China is "bright", despite a sluggish economy and many uncertainties in the industry,
"The demand for sports cars will continue to increase, so that we expect the sector to grow by 20 to 30 percent annually over the next five to 10 years," he added.
China's premium car segment presented an outrageous overdrive in the past decade. Surging demand made analysts expect China to catch up with the US as the top market for super luxury vehicles.
Statistics from research firm IHS Automotive show that sales of luxury vehicles in China surged from 45,000 units in 2001 to 736,000 units in 2012, representing an astonishing 1,550 percent growth.
During the past two years, sales of luxury vehicles saw more than 50 percent year-on-year growth, even though China's overall automobile sales growth slowed to single digits.
The phenomenal growth brought nearly all the top auto brands to China. IHS Automotive expects the market to keep on growing just as fast in the next three years, reaching annual sales of 1.7 million in 2015.
"China's fantastic economic growth seems to assure the future of ultra luxury cars," said Muller-Otvo.
"It's certainly a positive market compared with Western mature markets."
Zhong Shi, an independent auto analysts based in Beijing, said the next few years for luxury brands are no doubt rosy. Chinese consumers of luxury and super-luxury models are keen to impress.
A recent report from Hurun Research Institute showed that China's population of millionaires, with assets worth more than 10 million yuan ($1.6 million), topped a million for the first time at the end of 2011. In that elite group was an even-more elite group of 63,500 super-rich individuals, with assets of more than 100 million yuan.
The report also said that the number of high-net-worth people in China doubled from 2008 to 2011 and is expected to double again by 2015.
According to figures from French research company Robb and Ipsos, Chinese millionaires mostly favor leather goods and automobiles, which accounted for about 20 percent of their annual consumption.
Analysts forecast the trend is expected to continue for at least five to 10 years, with China's luxury car sales accounting for no more than 0.05 percent of overall sales, compared with 0.2 percent in Europe and the US.
Luxury automakers are aware of this, and so they are providing better services and new models to entice more discerning Chinese luxury consumers across the country.
Muller-Otvos told China Daily that Rolls-Royce expected to continue expanding its network of showrooms to more Chinese cities in 2013, especially in second-tier cities and in the western part of the country, without disclosing detailed numbers. It currently has 15 dealers in the mainland.
"And we are reinforcing our tailor-made services to Chinese customers," said Muller-Otvos. "We have received bolder and self-expressive custom-made requests from Chinese consumers. In 2012, we had a magnificent made-to-order drop head coupe delivered to a client in Shanghai, which features a fresh green tone inside and out."
Bentley also plans to expand its distribution network to 40 dealerships, covering all major provinces in China.
"The dealerships can help the headquarters better understand the requirements from our Chinese customers," said Lofkin of Bentley.
"Our headquarters employees have already been quite familiar with Oriental elements - dragon, flowers, and Chinese characters," said Lofkin.
"And we even prepare new colors, for example, dragon red, tailored for Chinese customers."
The 11th authorized Rolls-Royce dealer in China officially opened in Zhengzhou, Henan province, on Feb 7, 2012. Xiang Mingchao / China Daily
People take pictures of the EXP 9 F Bentley SUV concept car displayed at Auto China 2012 in Beijing on April 23. Jason Lee / Reuters
A Bentley car is shown at the 5th Zhengzhou International Auto Exhibition in Zhengzhou, Henan province, on Nov 2. Li Bo / Xinhua
(China Daily 02/14/2013 page9)