Is This The End Of The Chinese Luxury Car Craze?

Bertel Schmitt
by Bertel Schmitt

CAREFUL, NOISY! Lower volume before playing.

The Paris auto show opens its doors tomorrow to the press (sans TTAC, our suggestion to make a pilgrimage in a Dacia all the way from Rumania to Paris was inexplicably met with an “um, maybe another time,”) but the thoughts of makers of luxury cars are in China, where their party could be over.

Reuters boiled the China problem down to a simple sentence: “Premium-car buyers are showing signs of saturation.”

Sales of premium cars exploded in China over the last few years, along with the quickly rising numbers of the nouveau riche who needed to show that they made it. As that growth stops and people are scrambling for money, supply has overshot demand. Or so the theory goes.

“The Chinese have overconsumed premium cars in recent years,” Reuters cites Singapore-based Bernstein analyst Max Warburton. “Right now, we see a number of risks to sustained high profits from China.”

“Business will normalize,” hopes Friedrich Eichiner, CFO of BMW. IHS analyst Bin Zhu doesn’t expect the luxury-car boom to weaken substantially. What do you think?

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  • Tatracitroensaab Tatracitroensaab on Sep 26, 2012

    I think that the Chinese will still remain a gigantic market for growth, even if it does slow down for a few years. Luxury makers need to get into china and strengthen their position and prestige so that once the sales return, they'll be up top.

  • TonyJZX TonyJZX on Sep 26, 2012

    needs more pics of the girls in heels and black bikinis

  • Only car there I want is the Veyron.

  • Ellomdian Ellomdian on Sep 26, 2012

    So, the impulsive "me too" spending of the top 5% of the country has exhausted itself like a 16 year old on prom night because daddy Communist doesn't need his daughter home till 11? What do you mean the millions of people in China need cheap, reliable, and ideally domestically produced transportation and not baby-seal fueled hyper-cars that can't even carry some official's son and the 3 women fellating him without winding up in 3 pieces and ///REDACTED ? I am astonished! Next you are going to tell me that the idiotic practice of killing sharks for their fins and dumping them back in the water so newly upper middle class citizens can pretend they have the class and privilege their grandparents also pretended to have is bad for the global shark population. Or that an economic system built largely on the back of copying (and flawed copying at that) industrial processes results in stagnation because the very concept of innovation and independent thought is alien. I like China - I just wish they hadn't felt obliged to grow up from 14 to 30 on the world stage in less than a decade. They are trying so hard to prove they are successful and a World player that they are running over what actually qualifies as national identity. Same thing happened in post-war reconstruction Japan, same thing happened in the 90's in the Muslim world, and the sad truth is it's destined to fail...

    • See 1 previous
    • Ellomdian Ellomdian on Sep 26, 2012

      @stuki That "thing" being the pathological desire to adapt western ideals and lifestyles. So, yeah, I guess it has happened in the west...