23-Sep-2013
Automobili Lamborghini SpA expects sales of its supercars in China to stay almost flat in 2013, after two consecutive years of runway growth, because of a slowdown in the economy and Beijing's curbs on luxury spending.
The maker of the Aventador and Gallardo supercars sold about 230 vehicles in China in 2012. Its sales rose about 30% each in 2012 and the year before.
Sales grew during January-August 2013 compared with the year-earlier period, but "by the end of the year, I forecast that [in China] we will be more or less on the same level as 2012," Chief Executive Stephan Winkelmann said Monday.
"China, for us, is a challenge right now," Mr. Winkelmann told reporters in New Delhi, without disclosing the number of cars it sold so far this year.
China is the second-biggest market for the Italian car maker, after the U.S. Its fast growth in China was helped by a growing number of millionaires who could afford luxury products such as those made by Lamborghini.
According to a March report by McKinsey & Co., the market for premium cars in China expanded 36% a year in the last decade, topping the 26% annual growth the country's overall automobile market recorded.
Sales of premium cars in China totaled 1.25 million in 2012, making it the second-biggest market for such vehicles after the U.S., said McKinsey, which forecast the Chinese market for premium cars to reach 3.0 million units by 2020. McKinsey categorized premium cars as those produced by companies such as Lamborghini, Ferrari SpA, Audi AG, BMW AG, Jaguar Land Rover, Daimler AG's Mercedes-Benz unit, Porsche AG and Aston Martin.
However, a government clampdown on luxury spending to curb corruption and an economy that is growing at its slowest pace in more than a decade are putting brakes on luxury-car sales in China. Premier Li Keqiang has set a 7.5% growth target for the economy this year, the slowest rate since 1990.
"It is a bit more difficult to buy these types of goods and the market is not rising anymore," Mr. Winkelmann said about the Chinese luxury-car market.
However, Lamborghini is hopeful that a bounceback in the overall U.S. auto market would benefit supercar makers, he said.
The Volkswagen AG unit expects to sell more than 2,000 cars globally in 2013, almost the same as last year. It had reported a 30% jump in sales in 2012 to 2,083 cars.
Lamborghini estimates to sell about 600 cars in the U.S. this year, said Mr. Winkelmann, who was in New Delhi to inaugurate Lamborghini's second dealership in India.
The company's first dealership in India is in Mumbai, and it plans to add a third one in the southern city of Bangalore.
Lamborghini expects to sell 20 cars in India in 2013, up from 17 in 2012, and 15 in 2011. It has sold a total of 90 cars in India so far.
Mr. Winkelmann said India has a strong potential for growth in supercar sales, but factors such as inadequate road conditions and high taxes on imported cars are hindrances the market. "We have more Indian customers outside India than in India," he said.
The company has 120 dealers in 45 countries. The list includes 18 dealers in China, three in Australia, four in Japan, and one each in Thailand, Malaysia, Singapore and Indonesia.
Although Lamborghini cars are more immune than sedans and small cars to slowdown in economic growth and factors such as fuel prices and borrowing cost which are hurting auto sales in many markets, the company is facing business risks from high import taxes in several countries as well as from increasingly stringent vehicle-emission rules and the entry of new rivals, Mr. Winkelmann said.
India, for instance, raised the import tax on luxury cars and sport-utility vehicles to 100% from the start of this fiscal year in April from 75%. Last year, the tax was raised to 75% from 60% on these vehicles, which are classified as costing more than $40,000 and with gasoline engines of at least 3.0 liters or diesel engines of 2.5 liters.
Source:- online.wsj.com
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