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Luxury car makers target China's super-rich
by Staff Writers
Beijing (AFP) April 23, 2010

China's Changan confirms Peugeot tie-up talks
Beijing (AFP) April 23, 2010 - Chinese car maker Changan confirmed Friday it was in talks with PSA Peugeot Citroen of France on forming a new joint venture in China. The firms have had "a string of very smooth negotiations over the cooperation", Zhang Baolin, president of Changan Automobile, told reporters on the sidelines of the Beijing Auto Show, which opened to the media on Friday. "There is likely to be a result soon," he said, adding the talks covered both commercial and passenger vehicles. He did not give further details. Du Yi, a vice president of Changan, earlier told Dow Jones Newswires that the firms were negotiating to set up a 50-50 commercial vehicle joint venture and an agreement was expected in one to two months.

The new partnership will initially build cars in the southern Chinese city of Shenzhen, Du said. Peugeot officials at the auto show would not comment on the talks. Previous Chinese reports said the joint venture would make small cars and commercial vehicles under the Peugeot and Citroen brand names. Peugeot already has a joint venture with Dongfeng Motor Group, but intends to increase its presence in the world's number one auto market. It announced in January that it aimed to increase sales in China by 30 percent this year, double the growth rate for the country's whole market.

Beijing Auto to invest 3.7 billion yuan in green cars
Beijing (AFP) April 22, 2010 - China's Beijing Automotive Industry Holding Co. plans to invest about 3.7 billion yuan (541.9 million dollars) in the development of alternative energy cars, according to media reports on Thursday. Wang Dazong, president of the fift-biggest car maker in the country, said the money would be invested over the next few years to develop hybrid and environmentally friendly vehicles, Dow Jones Newswires reported. Wang also said the company would use the Saab technology it acquired from General Motors in late 2009 to build mid-sized cars. The cars are expected to start driving off the assembly line some time next year, he said. BAIC in December acquired the intellectual property rights for Saab's 9-3 and 9-5 car models for 140 million euros (187.35 million dollars) after it failed to take over the loss-making Swedish car company.

An extra-long Rolls Royce and the fastest ever Ferrari road car made their debut in Beijing on Friday as dozens of luxury car makers lined up to woo super-rich consumers in the world's biggest market.

Rolls Royce sold two models -- the more expensive of the two bearing a price tag of nine million yuan (1.3 million dollars) -- in the first few hours of the Beijing Auto Show, where nearly 1,000 vehicles have gone on display.

"Chinese are hard-working and they like to reward themselves, and the pinnacle product to reward yourself with is a Rolls Royce," said Paul Harris, the carmaker's Asian regional director.

But rich Chinese will be disappointed if they had hoped to get their hands on one of the limited edition 599 GTO Ferraris at the show.

The legendary Italian sports car maker has made just 599 of the cars, which can reach 335 kilometres per hour (200 miles per hour) -- making it Ferrari's fastest consumer car.

All of the cars, whose price tag Ferrari will not publicly divulge, have already been sold, including 20 in China, said Amedeo Felisa, the company's chief executive.

Luxury car sales in China have soared in recent years to become one of the fastest-growing segments of a market that sped past the United States in 2009 to become the world's biggest.

Automakers sold 13.64 million vehicles last year as increasingly well-off Chinese consumers continued to snap up cars, helped by government incentives such as lower taxes.

"A lot of people are getting rich very, very quickly and they are willing to spend on the most luxurious goods, whether that is watches or luxury cars," said Raymond Tsang of consulting firm Bain & Company.

China has the second-highest number of dollar billionaires in the world after the United States, according to Forbes magazine, and luxury carmakers say they expect strong sales growth in the years ahead.

British sports carmaker Aston Martin entered China in 2007 and said sales were so strong it would become its top market in Asia in 18 months.

"It's the fastest-growth market for us and it has the biggest potential," said Matthew Bennett, Aston Martin regional director.

"These are car enthusiasts who love to drive, which is a very select group of people in China. They love the car, they love the brand and they like to drive."

Rolls Royce, which has made an extra-long vehicle for the "chauffeur driven" Chinese market, said it expects sales to more than triple in 2010 to 300-400 cars, making China its number-two market in the world.

Its customers were "phenomenally successful" entrepreneurs who sometimes pay for the luxury cars in cash.

"Two months ago a customer came in with cash in the back of the car," said a Rolls Royce marketing executive based in Chengdu.

"People want to buy something to show their wealth."

The Chinese market has been a saviour for foreign carmakers as sales in developed countries slumped during the financial crisis and remain sluggish.

Ferrari, which sold more than 200 cars in China last year, said the Beijing launch of the 599 GTO underlined the importance of the Chinese market to its brand.

"For us, China is very important in our strategy, especially for the future," chief executive Felisa said.

"This region is one where we continue to evolve and develop our product."

The auto show, covering an area equivalent to nearly 40 football pitches, also features 65 concept cars and 95 alternative-energy vehicles.

The exhibition opens to industry participants on Sunday but media were given a sneak preview of the line-up on Friday.


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Carmakers rev up for Beijing auto show
Beijing (AFP) April 21, 2010
The fastest-ever Ferrari and a Chinese-made electric car will be unveiled at a glitzy show in Beijing on Sunday as automakers line up to woo customers in the world's biggest market. Nearly 1,000 cars go on display at the Beijing Auto Show, with 89 models making their global debut as manufacturers seek a bigger piece of a market that raced past the United States last year to take pole positi ... read more

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