The US might be the word’s fastest growing car market – but in the luxury arena, no country can keep pace with China.
Rolls-Royce, the British-based carmaker owned by German giant BMW, revealed that in 2011, for the first time ever, China over took the US as its biggest market. Of a record 3,538 car sales over the year, 31 per cent were to Chinese buyers – more than a hundred vehicles more than were bought in the US.
RR’s British-based rivals are also enjoying burgeoning demand from the east. Bentley last week reported that its sales in China had doubled in 2011, while in November, Aston Martin said it expected a quarter of its sales to come from the Asia Pacific region within two years. Italian sports-car maker Lamborghini, meanwhile, told newspaper China Daily that it planned to grow its Chinese dealerships from 11 to 20 by the end of 2012.
Arndt Ellinghorst, an analyst at Credit Suisse, told beyondbrics he expected the trend to continue. As China’s super-wealthy grow in number and look to exhibit their wealth, the demand for ostentatious vehicles will inevitably expand.
“A car is a huge way of demonstrating personal wealth – a status symbol,” he said. “Demand for brands like Rolls or Ferrari are driven by strong brand awareness that can be very difficult to replicate.”
Even more so when an already iconic brand gets royal approval. Catherine Middleton arrived at her wedding last April – watched by hundreds of millions of people worldwide – in a Rolls-Royce.
Ellinghorst also pointed to South Korea, Turkey and South America as regions where demand was likely to expand rapidly. The proportion of sales across the luxury vehicle universe from “non-traditional” markets could grow to 60-70 per cent of total sales, he added.
Rolls highlighted that growth in its established markets had been strong, too, with North American and UK sales up 17 per cent and 30 per cent respectively.
But it is clear that emerging markets were the standout performers. Its Asia-Pacific sales surged 47 per cent, while the size of its Russian market doubled. In the Middle East, where personalised “bespoke” – read, even more expensive – vehicles are particularly popular, sales climbed 23 per cent.
Rolls seems determined to sustain that growth into 2012. Chief executive Torsten Müller-Ötvös has revealed plans to expand in less-developed markets, including South America. Meanwhile, to mark the Chinese New Year starting from 23 January, the carmaker will roll out its “Year of the Dragon Collection”, with the mythical creatures painted on each vehicle’s wheelbase and embroidered onto the leather.
If you can’t wait, a new Rolls Royce Phantom will set you back around £250,000 – frills extra.