China Car Times

China Car Times rarely sees Lambo’s around the PRC, but Ferraris have become a regular sight. Boston.com elaborates: ww 

Ferrari, Lamborghini and other luxury carmakers say they’re faring better than mass-market producers as sales to the super-rich in China and the Middle East sustain demand even as world auto sales fall the most in at least a decade.Ferrari sales in China rose 25 percent to 200 cars in the first nine months, Chief Executive Officer Amadero Felisa said in an interview at the Paris Motor Show. Lamborghini’s Chinese orders jumped 60 percent to 45 cars and sales in the Middle East grew 52 percent. The US showed a 5 percent decline.”The Middle East and China are where demand is stronger,” Lamborghini Chairman Stephan Winkelmann said yesterday in an interview at the Paris show. “Network expansion is one of our main objectives, taking into account where new wealth islands are and making sure demand always outstrips our offer.”Ferrari’s success in emerging markets means the maker of the 205 mile per hour 599 GTB Fiorano is headed for a record profit this year, Chairman Luca Cordero di Montezemolo said. The Maranello, Italy-based company is now the fastest-growing unit of parent Fiat SpA, with sales up 21 percent in the second quarter and trading profit jumping 50 percent to 105 million euros ($145 million). Volkswagen AG’s Lamborghini, whose cheapest Gallardo model starts at 150,000 euros, aims to lift deliveries 5 percent this year. Global auto sales may fall 0.9 percent, according to JD Power & Associates.Annual economic growth of more than 10 percent for 10 straight quarters in China has boosted the ranks of the newly wealthy. Ferrari’s sales to East Asia will account for about a quarter of total deliveries next year, matching the US for the first time, CEO Felisa said. The company’s busiest Asian outlet, and ranked fourth overall, is in Macao, the only place in China where casinos are legal. The busiest dealership is in Las Vegas.

Out of interest, what super cars have our readers spotted around the PRC?  We regulary see Porsche, Ferraris, but hardly any Lambo’s. Other luxury brands such as Bentley, and Rolls Royce are often seen cruising the streets. 

In the midst of the Olympics, I missed an interesting story about a car tax that will go into effect September 1. Ostensibly it is designed to reduce pollution and vehicles that use a lot of gasoline. However, as the Economist points out, the real goal is to reduce imports from foreign car manufacturers, who conveniently make most gas-guzzlers.

Yet, while that sounds sinister, there is no real way to be cynical about this move. Even though China did not come up with this idea with the environment in mind, it nonetheless shows how the WTO can help promote a more efficient marketplace. After the WTO Court ruled that China’s import tariffs were in violation of their committments to free trade last month, the government came up with a creative way to continue to protect its local auto industry.

One might argue that this is protectionism, and it is. But the Chinese have managed to create a genius and positive form of it. They were only able to implement this policy because the local car industry has a natural advantage over foreign competition: its fleet is more fuel efficient. If, for example, things were reversed and domestic industry was producing gas guzzlers, the Chinese never could have gotten away with taxing smaller engines. Instead, China can promote this policy because it is in the interest of the enviornment, an area that the free market typically ignores (free market economics never work well with externalities).

So I say kudos to an increasingly sophisticated group of Chinese lawmakers. Regardless of the motives behind the move, the results will be positive. Not only will more of the cars on the road be of the Chinese small-engine variety, which use less gas, but you should also expect to see foreign competitors building more models that fit the mold. And don’t be surprised if many of them end up in markets outside of China, cleaning the air for those in the rest of the world as well.

A Cup of Cha

The only reasoning against this is that many of the Chinese car makers are intent on knocking the Camry and Accord out of the mid size sedan segment, and by using their own, sometimes crude engine designs or off the shelf Mitsubishi motors.

Porsche launched their Cayenne Turbo S in China several days ago, the specifications are eye watering, but that is nothing compared to the price: 2.35 million RMB, roughly double what CCT paid for a good house.

If you want to put down a deposit to secure yourself the Turbo S, then you’ll have to come up with 200,000rmb, roughly what CCT paid for a good car. In 2007, Porsche sold 2,150 Cayennes in China, which accounted for 80% of Porsche China sales.

Porsche officially (they were available before that) came to China in 2001 first in Beijing, and then spread elsewhere as demand for Porsche cars grew. According to media reports, Porsche sold a mere 205 cars in 03/04, but sold 3105 cars in 06/07.

CCT can honestly say that he see’s around 10 black Cayennes everyday, which makes us wonder 1) There must be many more wealthy people than we think 2) Do Porsche sell them in any other color in China)

Daihatsu seem to be wanting to get back into the PRC market after several years absense from the PRC, their last car, the Tarios, was sold in few numbers until it turned into the Zotye SUV (although we’re not entirely sure how). Previously Daihatsu were involved in making their minivans in China, then small SUV’s before dissapearing completely, however, it appears that Daihatsu are having a second run at the Chinese market with a new line up, including the Copen roadster, and also this Daihatsu Bego which was spotted recently in China:

The compact SUV market has really taken off in China, with stiff competition between the Japanese and the Korean brands, although the Chinese brands have yet to bring in a real fighter other than the Chery Tiggo, the Bego’s expected end of year launch in the PRC is only going to add pressure to the Chinese makers to push out their own competitive compact SUV.

The Chevrolet Orlando MPV is going to be launched at the Paris Auto Show later this month, but Chinese motor fans have been quick to spot a GM MPV out testing, and many believe it to be the upcoming Chevvy Orlando. The Orlando isnt expected to be launched until 2009, or even 2010, but the car is undergoing road testing in and around the Shanghai area. The Chevrolet Cruze is expected to be launched before the Orlando.

China Car Times will keep you updated on the Orlando developments.