March 20, 2013
MAKERS of luxuries are nervous about China. Its economy has cooled. Worse, its new political leaders are threatening to crack down on ostentation and corruption. What should have been a season of festive political ?gift giving? has become a nightmare of rectitude for manufacturers of expensive watches, jewellery and the like. Yet firms that sell fancy cars are as ebullient as ever.
China?s market for such cars has grown 36% a year over the past decade. A new report from McKinsey, a consultancy, calculates that China is now the world?s second-largest market for ?premium? cars (which include posh brands like BMW and Aston Martin plus the snazziest offerings from mass-market producers like Volkswagen and GM). It estimates that China will surpass America by 2020 to become the world?s biggest consumer (see chart).Would not a crackdown on official cars hamper this growth? In the past it might have. The market for luxury cars was initially fuelled by demand for chauffeur-driven models for officials (black Audis are preferred). Bill Russo of Booz & Company, another consultancy, observes that BMW designed a model just for China with a longer wheelbase, to give back-seat...
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