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Bentley in China: By James Rice, Shanghai 11 July 2005

The world’s largest communist country seems an unlikely place to sell luxury cars, but sales of Bentley cars in China have been phenomenal. Since China’s economic opening two decades ago, its GDP has quadrupled. That’s made China the fastest growing economy in the world, and the fastest growing auto market, too. China is already the world’s third largest automobile market with an annual growth rate this year projected at 10%. Along with that economic growth, a wealthy middle class is developing at an exponential rate, bringing with them a few super-rich who can afford a luxury lifestyle. Recently, Merrill Lynch reported there are 236,000 millionaires in China. That’s about 1/10 the amount in the USA, but unlike the USA, this number is projected to grow at 12% a year… and they are looking for things to buy.

 

“Bentley has been active in the China market since 2002”, according to Sam Graham, Bentley Motors’ Sales and Distribution Director. That’s when Dah Chong Hong Motors Group (DCH) was appointed as the exclusive China distributor of Bentley and Rolls Royce. In the four years since, DCH has followed the economic wave in China and built Bentley into the leading premium auto brand in China. For Bentley Motors, China has become their fourth largest market, behind the US, UK, and Japan, for their luxury Arnage sedan.

 

The road was not easy, given that the Bentley and Rolls Royce brands were separated in 2003. DCH retained the Bentley brand, and a sales team who had to promote the less well recognised luxury brand to Chinese customers. But the new Rolls-Royce Phantom was late to the Chinese market by almost one year, and DCH, who were selling the only premium car brand in China, launched an aggressive advertising and marketing campaign. This included an unusual tactic for the Bentley brand: a larger-than-life outdoor advertising billboard on the freeway to the airport. During the 5 days of the Shanghai Auto Show that followed, DCH sold 5 long wheelbase Arnage RL sedans, and every customer had seen the billboard!

“Targeting potential Bentley customers in China is more difficult than in other markets”, says Leo Wong, Bentley Shanghai’s General Manager. China’s newly rich population prefers to remain low key and unknown in this communist country. These customers are rich but without names; they are mostly younger entrepreneurs, between 35 and 45 years of age, independent business people. Many enquiries come from the local auto shows, but Wong’s sales team makes outside sales calls to local business leaders every day. Dinners, golf, and charity events together with the Dunhill, Breitling, and Davidoff help expose potential customers to Bentley cars and a luxury lifestyle. The Chinese name of Bentley, Bing Li, helps a lot. Bing means guest or customer and Li means profit. In a culture with a lot of auspicious meanings and belief in Feng Shui, a car that attracts customers and profits has a very persuasive sales pitch.

No bank financing is available in China for automobiles; all Bentley customers pay cash. This is no small feat considering taxes and duties result in a price for the Arnage RL, which is the best selling model, priced at 4.88 million Chinese Yuan or US $593,673. Price hasn’t slowed Bentley down at all, as Sam Graham explains, “Bentley sales have grown year-on-year and we expect the situation to continue in 2005 with the launch of the Continental Flying Spur.” This latest model was launched in April at the Shanghai Auto Show, where DCH booked 10 orders for the car on the first weekend.

Traditionally, Chinese customers are unwilling to wait for a customized vehicle, so most purchases are out of the dealer’s inventory of existing cars. Given his knowledge of the customer base, Leo Wong personally orders each of the cars with a high level of specification, but this year he has noticed a new trend of customers willing to order and wait for their own bespoke Bentley.

Little known in the US market, the Bentley Arnage 728 Limousine has been a huge hit in mainland China, the number one market for the car. Out of a total of seven Arnage 728 Limousines sold worldwide, five have been sold in China, each for nearly US$1 Million. With the addition of 728 mm (28.6 inches) to the standard Arnage wheelbase, the car has a formal centre section with an interior division. The emphasis is on providing exceptional luxury and space to the rear passengers, who would be driven by a chauffeur at all times. The additional space permits a wide range of coach built interior options, including a large LCD entertainment screen, theatre surround sound, writing tables, cocktail cabinets, cigar humidor, and a rear sunroof. It can also be specified with two additional fold down seats for extra passengers.

All this represents the contradictions of modern China. The country is working its way towards a capitalist future within the context of a communist system. The country’s leader, Mr. Hu Jintao has promised to quadruple the GDP again by 2020. It’s likely that China will be the largest economy in the world by 2030. No doubt more customers for luxury items and Bentleys will emerge during the process.