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A New Luxury Entrant in China

McLaren opens its first showroom doors in China.
British supercar manufacturer McLaren opens its showroom doors in China on Monday as it races to catch up with global rivals in the world’s second-largest luxury car market.

McLaren Automotive, which builds the £1m P1 supercar, is entering the country as part of an aggressive drive to ramp up its Asian presence to 13 dealerships this year and hopes the region will account for a third of its global sales in future.

Mainland China has become a key market for luxury marques such as Ferrari, Lamborghini and Bentley. In spite of a recent slowdown in economic growth, the country is expected to overtake the US as the biggest premium car market by the end of the decade.

“China is one of the most exciting and dynamic markets in the world where we will make every effort to be well received,” said Ron Dennis, McLaren chairman. “Our entry into China . . . represents a significant milestone in the development of the company.”

The woking-based manufacturer, which last year sold 1,400 cars and exported 80 percent of its production, is targeting 10 percent of future sales to come from China.

McLaren’s growth is part of a resurgence in the UK car industry, written off at the turn of the millennium but now roaring back as a global leader in high-end manufacturing.
With European car demand hit by the continent’s economic gloom, China and other emerging markets such as Russia and India have become crucial battlegrounds for high-end car brands targeting the emerging world’s newly minted rich.

Ferrari, which entered mainland China in 2004, sold around 350 cars in the country in the first six months of the year – about 10 percent of its global deliveries. China is Lamborghini’s second-largest market, after the US.

“Entering the Chinese market is both a huge honor and a major opportunity for McLaren Automotive, and it highlights the continued development of the company,” said Mike Flewitt, chief executive.

China will be the 27th retail market for the carmaker, which has been ramping up its sales footprint in Asia this year, cutting the tape on dealerships in cities such as Tokyo, Hong Kong and Sydney.

Indonesia and Malaysia are set to follow before 2014 as part of a concerted effort since 2010 to expand McLaren’s brand beyond Formula One racing and into sports cars sold globally.

Our Thoughts

Despite any economic slowdown, China still draws the attention of foreign luxury brands. The market, despite slowed growth, still outpaces other luxury markets, which is why McLaren, and other luxury brands, still see a mountain of potential.

An optimistic outlook for McLaren to expect China to account for a third of its global sales in the future, but we feel this is quite likely to happen. I look forward to seeing these cars zipping around the streets of Shanghai and Beijing.

By Joshua Roberts 
  Creative Director

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