China becoming a buyer’s market for luxury cars
Oct-27-2011 By : agxadmin
China is turning into a buyer’s market for luxury cars as dealers for BMW, Daimler and Volkswagen’s Audi offer discounts to maintain sales as demand cools. In Beijing, BMW dealerships have cut as much as 19% off the price of a 3-series car, while some Mercedes dealers are selling the C-Class Elegance model at 20% less than the retail price, according to cheshi.com, a pricing guide tracking more than 3,000 dealers in the country. BMW, Daimler and Audi, the three largest luxury carmakers, face slowing sales growth and falling prices, as some cities impose driving curbs and the central bank tightens lending. The growth in demand for high-end vehicles cooled to 29% in the first eight months of this year from 48% last year, according to researcher JD Power & Associates. A tightening economy may cause buyers, such as those in mid- to upper-level management jobs, to rethink or delay luxury purchases, said Scott Laprise, Analyst at CLSA Asia Pacific Market. High inventory levels for luxury brands are pressuring Chinese dealers to cut prices, JD Power said in a recent report. “While we expect luxury to outperform the sector, we are seeing early cracks in [the form of] sales slowing and discounting,” Laprise said. Audi’s A6L, China’s most popular premium car last year, sells for as much as 16% below the retail price in Beijing’s Fengtai district, according to cheshi.com, which started tracking car prices in 1999. Chinese buyers can choose from 471 models across 94 brands, and softening demand has cut or eliminated waiting times for high-end models. In September last year, customers waited about three months for entry-level luxury cars, but now the wait for these models is gone. “Mercedes-Benz has maintained its strong growth momentum during the first eight months of 2011 through sales of 123,590 units, an increase of 41%, said Daimler Spokesman Arnd Minne. In the first eight months of this year, Audi sold 196,534 cars in the mainland and Hong Kong, a 29% increase from a year earlier, while BMW was confident it would achieve record sales in China this year, the South China Morning Post reports.
Great Wall ending dispute with Fiat
By : agxadmin
Great Wall Motor Co said it will not appeal an Italian court’s ruling that the design of its old auto model GW Peri was an infringement of Fiat’s Panda, putting the three-year long civil dispute to an end. The Hong Kong-listed car maker said the litigation would have no adverse impact on its operation, business or financial conditions. President Wang Fengying said the company was not only expected to double earnings this year, but it was also on track to meet its year-end sales target of 500,000 vehicles, despite slower growth in the market. Italian carmaker Fiat Group Automobiles filed a lawsuit against Great Wall in China in 2008, claiming that the latter copied Fiat’s popular second-generation Panda as Peri. A court in Hebei dismissed the claim and Fiat’s later appeal against the judgment was also dismissed by a Chinese higher court. An Italian court ruled in favor of Fiat in April, although the judgment offered little relief as Peri was never exported to countries in the European Union and ceased production last September.
Agreement between Pang Da and Saab no longer valid
By : agxadmin
Pang Qinghua, Chairman of Pang Da Automobile Trade Co, has said his company’s investment agreement with Saab is no longer valid after the cash-strapped Swedish carmaker filed for bankruptcy protection. Saab is also waiting for a bridging loan of €70 million that was secured by Youngman Lotus. The agreement would still need approval from the National Development and Reform Commission (NDRC). Zhejiang Geely Holding Group, which owns Sweden’s Volvo Car Corporation, had no intention to buy Saab, Lawrence Ang, Executive Director at Geely’s Hong Kong-listed unit, said. Swedish Automobile CEO Victor Muller, owner of troubled car maker Saab, turned down a full-blown takeover offer from China’s Zhejiang Youngman Lotus Automobile and Pangda Automobile. “The token offer was unacceptable because it would trigger every conceivable change of control clause and that would possibly mean the end of Saab,” he said. If the two Chinese car makers were still interested in Saab, they should stick to the terms of a deal signed in July that would see them take a combined 53.9% stake in Amsterdam-listed Swedish Automobile, he said. In their first offer, the two Chinese companies wanted to buy stakes in Swedish Automobile but in their newest offer they wanted to take over the company for a token sum. “Failure of the Saab deal may be a good thing, because Pang Da and Youngman can’t save Saab no matter how much they invest,” said John Zeng, Shanghai-based Analyst at IHS Global Insight. Saab Spokeswoman Gunilla Gustavs said that contact with the two Chinese companies had not been broken off.
Auto sales up on subsidy change
By : agxadmin
Chinese automakers sold 1.64 million vehicles in September, up 5.5% from a year earlier, the China Association of Automobile Manufacturers said (CAAM). From October 1, the central government revised the CNY3,000 subsidy to cars consuming no more than 6.3 liters of fuel per 100 kilometers ― lower from the previous 6.9 liters per 100 kilometers. Demand for compact and midsized sedans was particularly strong, as they would no longer be able to take advantage from the subsidies. In September, GM’s sales rose 15.3% year on year to 240,244 units, while Shanghai VW’s sales rose 13% to 105,564 units. The CNY3,000 subsidy is the last of a host of government stimulus measures including tax rebates and other buyer incentives that boosted sales growth dramatically in 2009 and last year, helping China overtake the U.S. as the world’s biggest vehicle market. But demand has weakened since most stimulus measures expired at the start of this year. In the first nine months, carmakers’ total shipments of passenger vehicles to dealerships rose 6.7% to 10.7 million units. Luxury sales remain the best performers by segment. Volkswagen Group’s Audi unit said sales at its China joint venture, FAW-Audi, rose 33% last month to a new monthly record of 29,188 cars. BMW reported a 21% rise in sales to 18,588 units and Daimler’s Mercedes-Benz saw them rise 13% last month to 15,815. The hardest-hit segment continues to be commercial vehicles, where sales fell 4.8% to 3.1 million units in the first nine months. “Passenger vehicle sales may see negative year-on-year growth in the fourth quarter,” according to Rao Da of CAAM. Analysts said the sales dip could lead to a price war.
Lamborghini expected to sell 57 cars in Hong Kong this year
By : agxadmin
Lamborghini is expected to sell 57 vehicles – including 17 of the new HKD6.3 million Aventador – in Hong Kong this year. The first local deliveries of the new model began this month, but prospective buyers face an 18-month waiting list. The Aventador has a carbon-fibre shell, burns 27.3 liters of petrol per 100 km of city driving and accelerates from zero to 100 km/h in 2.9 seconds. Mainland China may overtake the United States this year as Lamborghini’s biggest market globally. The company sold 138 cars on the mainland in the first six months of the year, up 60% from a year ago. Lamborghini is in the process of doubling its China dealerships from nine showrooms and service centers at the end of last year to a targeted 20 by the end of this year, including new stores in Taiyuan, Shanxi province, and Shenyang in Liaoning province. In July, the company opened its first dealership in Macao, where it expects to sell around 10 cars this year.
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