Luxury Automakers Target China’s “Wild West”
Volvo stand at the Chengdu Motor Show
With demand rising steadily in inland China as consumers in top-tier cities on the country's wealthier east coast cut back, luxury automakers are looking to expand in second-, third- and even fourth-tier Chinese cities in the hopes of pushing sustainable long-term growth. Recently, looking to jumpstart their efforts in southwestern China, major marques pulled out all the stops at the Chengdu Motor Show, which — despite being overshadowed by bigger annual events in Shanghai and Beijing — saw the release of 48 new domestic and imported models, including six global debuts and attracted 550,000 attendees.
Over the course of the show's 10-day run, the Tianfu Morning Post pointed out this week that at least 1,673 vehicles were sold, including 873 luxury cars. Some auto industry giants proved far more popular than others, however, with Jaguar Land Rover (which plans to build its first overseas manufacturing plant in China) alone selling nearly 400 units.
The auto market in southwest China has proven increasingly lucrative for major automakers in recent years. In the first half of this year, passenger vehicle sales in Sichuan, Guizhou, Yunnan, Tibet and Chongqing reached 560,000 units, according to the Global Times, a rise of 8.6 percent year-over-year and much higher than the national average of 2.9 percent.
Model at the 15th Chengdu Motor Show
Fighting a tepid automotive market which, after a nearly 10-year tear, is showing a marked slowdown, top brands put in extra effort at this year's Chengdu Motor Show. To stir up enthusiasm among southwest Chinese attendees, automakers flew in celebrity brand ambassadors like Karen Mok and Chen Kun for appearances. As auto industry analyst Jia Xingguang told Beijing Business Today, "The reason why the car enterprises put so much emphasis on the show is simple; it's because of the increasing purchasing power in southwest China."
This is certainly behind the massive expansion we saw last year in Chongqing — in 2011 alone, Lamborghini, Brabus, Aston Martin and Rolls-Royce all made their debuts in the sprawling municipality — but we're curious to see how well this investment plays in less established markets like Yunnan and Tibet.
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