Lamborghini signals luxury shift from China to us, japan

0

TRADITIONAL MARKET: The Lamborghini SpA Gallardo LP 570-4 Squadra Corse automobile is displayed at an unveiling in Tokyo. — Bloomberg photo

After years of profiting from China’s appetite for high-priced toys, makers of hyper-luxury cars are shifting their focus back to more traditional markets such as the US and Japan.

“The US is really getting back on track and getting more important for us,” Lamborghini SpA chief executive officer Stephan Winkelmann said in an interview in Tokyo.

“In China, “there is a slowdown in high-end luxury,” he said.

US demand for Lamborghini’s US$400,000-plus Aventador flagship is growing at a pace reminiscent of the years before the 2008 global financial crisis, Winkelmann said.

And as Prime Minister Shinzo Abe kickstarts the economy, Japan also stands out, he said.

Concerns over China, echoed by Fiat SpA’s Ferrari and Bayerische Motoren Werke AG (BMW)’s Rolls-Royce since last year, showed how the country is no longer the driver of growth it was three years ago when it pulled the world out of recession.

A slowing economy and a government push against lavish spending have undermined sales of luxury goods ranging from supercars to Prada bags and Bordeaux wines.

“Luxury carmakers are suffering, and a lot of high-class restaurants that serve expensive dinners are suffering too,” said Andreas Graef, a consultant at AT Kearney in Shanghai.

“Clearly China’s millionaires and billionaires are more cautious of how they show off their wealth, from expensive watches to expensive liquors.”

Squeezing Luxury

The US is currently the strongest market globally, and Chinese demand for luxury cars is unlikely to ever experience the kind of expansion it saw over the past several years, Graef said.

After dropping 29 per cent in 2009 to 2,500 units, sales of vehicles costing more than two million yuan (US$327,000) surged to a record 9,000 in 2011 before dropping back to 8,000 last year, according to AT Kearney.

“All luxury consumption has been squeezed,” said Zhu Bin, senior analyst at researcher LMC Automotive in Shanghai.

“Until 2015, the luxury-car segment won’t recover to the levels we saw in 2012.” — Bloomberg