McLaren Sees China Slowdown Persisting Amid Bling Crackdown
McLaren Automotive Ltd., maker of the million-dollar P1 supercar, said it has yet to see signs of a recovery in demand in China since the ruling Communist Party began cracking down on conspicuous extravagance late last year.
“The visibility that used to be an asset -- we used to be OK just a few years ago -- now it’s not really a plus,” Mirko Bordiga, regional director of the British supercar maker, said in an interview yesterday in Guangzhou, southern China. “There are many issues that are in the market that doesn’t really let us hope that the market is growing that much.”
The comments signal that the slowdown in Chinese demand for luxury, sapping sales of everything from Vacheron Constantin watches to Remy Martin cognac, will stretch into 2014. Lamborghini SpA, Fiat SpA’s Ferrari and Bayerische Motoren Werke AG’s Rolls-Royce have voiced concerns since 2012 that China is no longer the driver of growth it was three years ago when it was pulling the world out of recession.
McLaren, which forecasts its global sales to be little changed next year at about 1,400 vehicles, isn’t prepared to miss out on opportunities to promote its products to China’s rich. Like Volkswagen AG’s Bentley, McLaren chose to display its vehicles at this week’s Guangzhou auto show, a smaller affair than the flagship Beijing or Shanghai exhibitions, at the expense of the biennial Tokyo motor show.
McLaren plans to triple the number of showrooms in the country to 12 in 2014, and will bank on the Chinese love for new brands and the racing team’s profile in Formula One to boost sales, Bordiga said.
“Even though there’s the slowdown, the market will still be growing and you have to be here,” said Andreas Graef, a Shanghai-based consultant at A.T. Kearney, which advises automakers in the world’s second-biggest economy. “You cannot miss that show, because every brand needs to raise their brand awareness in China.”
The world’s most populous nation is the largest market for Koenigsegg Automotive AB, whose cars start at $1.4 million. The automaker, which sells about 15 cars globally a year, has four orders for next year from China and will probably get “another one or two,” said Andreas Petre, the automaker’s head of sales.
“The growth has been enormous over the, let’s say, last five years in China,” said Petre. “It’s still going to grow, but not as steep.”
VW’s Porsche AG, maker of the 911 sports car, is displaying its most expensive model -- the 918 Spyder with a 13.4 million yuan ($2.2 million) price tag -- in Guangzhou.
Sales next year will be boosted by the new Macan SUV that debuted at the Los Angeles Auto Show this week, said Deesch Papke, Porsche’s China head. The Stuttgart, Germany-based automaker automaker also introduced the 911 Turbo S at the show.
“We have the expectation of exceeding our volumes of last year and next year is going to be even better for us,” Papke said.
Separately at the Guangzhou show, Volvo Cars expects to double its China market share over the next five to seven years as the carmaker ramps up local production, according to Lars Danielson, a senior vice president. Nissan Motor Co. has fully recovered from the anti-Japanese consumer sentiment triggered by last year’s territorial dispute, said Ren Yong, vice president of the Japanese automaker’s Chinese venture.
To contact Bloomberg News staff for this story: Alexandra Ho in Shanghai at firstname.lastname@example.org
To contact the editor responsible for this story: Young-Sam Cho at email@example.com