Shortage drives up luxury car surcharges
Updated: 2010-12-02 16:44
By Song Jingli (chinadaily.com.cn)
Luxury car buyers in Beijing, Shanghai and Guangzhou might face delayed delivery of their dream cars or be forced to accept dealer surcharges as high as 100,000 yuan ($14,869.89) if they want to get them before the Spring Festival, the Internet news portal 163.com reported Thursday.
Inventory shortages are making it harder to buy a luxury car worth more than 1 million yuan in China this month. Car models that can not be bought immediately include the Mercedes-Benz S600, BMW X5, BMW X6, Audi Q5, Audi Q7 and Porsche Cayenne.
If buyers are willing to pay an extra surcharge of 30,000 yuan to 100,000 yuan, some of these cars can be delivered within one month or two. For other models, buyers still might have to wait six months even if they pay the surcharge.
Luxury car sales are up
Mercedes-Benz set this year's sales target at 120,000 cars. BMW might try to sell more than 150,000 cars, and Audi's sales might exceed 220,000 cars.
However, BMW only has an annual capacity of 75,000 in China. Mercedes-Benz reportedly will not be able to produce more than 100,000 this year. Audi, the early-comer into the Chinese auto market, reportedly will not be able to produce 200,000.
Imports can't meet demands
Audi models manufactured in China accounted for 86 percent of all Audi cars sold in China. It was 43 percent for BMW and 32 percent for Mercedes-Benz.
While the local supply failed to satisfy rising demands, the car makers have to import vehicles for making up. However, importing more cars might seem like a practical solution, but it cannot solve the immediate problem, according to Cui Dongshu, vice secretary-general of National Passenger Car Information Exchange Association,.
Cui said international automakers have less capacity due to the global economic crisis, and it's hard for them to make an instant adjustment.
More billionaires in China
"There are too many rich people with great purchasing power in China. Some just want to get their car before the Spring Festival, so they are willing to pay the surcharge," a BMW dealer in Guangzhou, who was not named, told 163.com. The Spring Festival is an important festival in China and a time for family reunions. The upcoming Spring Festival falls on Feb 3, 2011.
The Hurun Rich List 2010 released in April shows that there are 875,000 people in China with a personal wealth of 10 million yuan, up 6.1 percent year-on-year. The report shows there are 55,000 people with a personal wealth of 100 million yuan, up 7.8 percent year-on-year.
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