Shanghai Auto Show: As Luxury Cars Fly Off The Lot In China, The Government Pulls The Brakes
At last year’s Beijing auto show, a man walked up to the Roll Royce booth with a suitcase full of “Red Maos” – as the 100 yuan note is called in China, the largest note equals $15.40 – and walked away as the owner of a Rolls Royce Phantom. At least that’s what AFP heard. Because of taxes and duties, a Rolls-Royce Phantom started at 6.6 million yuan ($1 million) a year ago. That translated into 66,000 red banknotes.
At this year’s Shanghai show, no suitcases were proffered. However, “using connections to enter the show on the media preview day, millionaires bought two Rolls Royce Phantoms, which start at nine million yuan ($1.3 million) and four of the new Ghosts, starting at 5.1 million yuan.” The “connections” came cheap. On media days, there is a booming market for press passes outside of the show.
Aston Martin Aston Martin sold one of its super-luxury One-77s for 47 million yuan ($7.22 million.) “We don’t like to say it’s the most expensive car in the show, but we are pretty confident it will be,” Matthew Bennett, the Asia-Pacific director for British luxury car maker Aston Martin told AFP.
Despite a murderous 145 percent tax on imported luxury cars, China’s luxury car sales are expected to rise to more than 909,900 units this year, up from about 727,200 last year, according to forecasts by IHS Automotive.
China’s trend to conspicuous consumption might turn into its downfalls. There is rising public dissatisfaction with a widening wealth gap. The government is sensitive to this and has vowed to pursue more equitable growth in the future. As a first move, the government is clamping down on overly ostentatious displays of affection with dough. Already, Beijing’s government lashes out against billboards that advertise a flamboyant lifestyle. This is widely ignored. Now, Beijing handed down a regulation that hurts:
Beijing suddenly classified any vehicles beyond 6 meters (20 feet) as commercial vehicles, Automobilwoche [sub] reports. Meaning: They must stay in the truck lane and are banned from the ritzier thoroughfares. A billionaire might not reach his garage in the tonier parts of China’s capital. As an answer, Rolls Royce did not just debut an extended wheelbase Ghost in Shanghai. Rolls also promised a shortened Phantom that skirts the 6 meter limit.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Gee, I hate to refute perfectly good anecdotal evidence with actual facts, but if you think people in China are making about half of what people in the US make, you're pretty far outside what the rest of us call reality. According to the CIA World Factbook, for 2010 the median income per person in China was $7,400. For the US, $47,400. So more like one sixth, than one half. Now in purchasing power parity terms the amounts are closer, but then we're discussing global competitiveness, in which case local pricing doesn't really matter.
I think its fantastic that this yahoo can walk into a show and walk off with another generically painted R.R... However.. Knowing how those people drive... how long ya think its gonna be till he plows someone, or gets plowed himself?