News

The Luxury Guru
August 24, 2009

Big Flashy American Cars Sell Well In China
Patti Waldmeir, FT Shanghai correspondent

   In the US, cars need giant cup-holders, but in China, it’s chauffeurs that are de rigueur. So when Porsche recently decided to launch a four-door sedan in the midst of financial Armageddon, it chose to do so in China – perhaps the last place on earth where anyone still has RMB2.5m (£200,000) to spend on a chauffeur-driven sports car.

   At the Shanghai auto show in April, the Porsche Panamera – which offers the ample legroom required by China’s back-seat-riding bosses – premiered alongside the Geely GE, otherwise known as the Baby Rolls-Royce (much to the displeasure of the real Rolls-Royce). Then came news that China plans to buy Hummer and make it greener. China’s love affair with big, flashy autos is clearly just beginning.

   The newly wealthy everywhere love to flaunt their money, but China’s rich are even more shameless than most: cars are not a means of locomotion for the affluent Chinese, they are a symbol of success, status and the naked power of the internal combustion engine over the bicycle or pedestrian.

   According to Friedhelm Engler, director of design for GM’s Shanghai-based Pan Asia Technical Automotive Center, cars in China are all about “face”. He says the bulky, “three-box” shape that is still overwhelmingly popular is deeply embedded culturally in a country where the rich traditionally rode in palanquins. To western eyes, that makes many Chinese cars look old-fashioned, especially on the futuristic streets of Shanghai, with its space-age skyscrapers. And parking such cars – not to mention parking a “Baby Rolls” – is a nightmare in the city’s congested, narrow streets.

   China needs smaller cars, and some younger consumers are leaning toward hatchbacks; but in a country where grandpa or dad is often footing the bill, four doors still often win out over five (not least because grandpa or dad may not know how to drive, so they rely on the younger generation to squire them around at weekends in the three-box). This is a world where the young can start their motoring life with a Buick, not a 2CV or Beetle; Buicks are more popular in China than they have been in the US for decades.

   But western car manufacturers are betting that things will change, as China’s budding love affair with the automobile matures. The country is on track to become the world’s largest auto market this year – several years ahead of expectation – and car styles could be transformed at the speed of light. “Chinese consumers are used to moving quickly, from no TV, to a flatscreen,” says Engler. Their auto style may be dowdy today – but in China, tomorrow is always just around the corner.