The number of millionaires and billionaires in China is growing. Many luxury manufacturers are setting up shop or increasing their visibility early to take advantage of future growth in that market. So is China the next leader of the luxury car marketplace?
The number of Chinese with investable assets of one-million dollars (not including primary residency, collectibles, and consumables) has grown the past few years, surpassing Britain for the number four spot last year and France the year before that. China was able to accomplish this despite still being affected by the economy and losing 49,000 millionaires in 2008 for a new total of 364,000. Meanwhile, the United States is home to the world’s largest number of millionaires, at 2.5 million, but down from three-million millionaires in 2007.
The number of billionaires in China now totals 130 people, up from 101 in 2008, and none in 2003. CNN reports that that number may be higher, maybe even double, since many people in China keep their finances to themselves to stay away from the scutiny of tax authorities. In contrast, Forbes estimates that the United States has 359 billionaires.
With an increase in wealth comes an increase of sales of luxury goods and the luxury car market is showing this directly.
Lamborghini sold 32 percent more vehicles in China in the months between January and June of this year compared to the previous year, for a total of 29 units. In comparison, Lamborghini sold 207 units in the United States and 825 autos worldwide between the months of January and June. Although not an astonishing number, the company’s sales in China have slowly increased the past four years from six cars in 2006, 28 in 2007, and 72 in 2008.
Ferrari has also watched a rise in the number of units sold in China; selling 20 percent more autos in 2008 compared to 2007, for a total of 212 units. In the United States, Ferrari sold 1,700 cars in 2008, equating to 26 percent of the company’s total sales.
Other luxury manufacturers doing well in China includes Bentley and Rolls-Royce. Bentley sold 58 percent more vehicles in China in 2008 compared to 2007 for a total of 407 autos. If you want to look at Rolls-Royce's success just look at Beijing, which is reportedly the world’s third largest Rolls-Royce market behind Dubai and Abu Dhabi. In total, 52 Phantoms were sold in Beijing in 2008, each with a price tag near 10-million yuan or $1.5 million at the current exchange rate.
Although the data shows a huge lead in the number of wealthy by the United States, the statistics also show dramatic growth in China. So despite the large differences in terms of the amount of wealth between the United States and China, the 2009 World Wealth Report predicts the amount of wealth the wealthy have in the Asia-Pacific region will exceed that of North America by 2013 and, as shown above, more wealth equals more luxury goods being sold.
[via 2009 World Wealth Report, 2009 Hurun Report, CNN, Jalakam.co.in, and AutoEvolution]