Today is the start of China Fashion Week and I thought I would mark this auspicious occasion with my first real post on luxury cars, and a little pondering on the pitfalls of China’s current consumption trajectory.
I prefer, and so tend to focus on the fashion side of the luxury business in China, yet the luxury auto brands are in many respect leading the charge in China. Luxury auto brands have been succeeding in China for over a decade and in L2 Think Tanks recent China Digital IQ study that I covered in this post, the automotive brands came out on way ahead of fashion brands in their digital media efforts in China.
Today while walking past the 3.3 shopping arcade in Beijing’s CBD, I was quite astounded at the number of luxury cars there. Out of 30 car spaces there were three Maseratis, one Lamborghini, one Porsche, six Mercedes, four BMWs, two Audis, two brand new Land Rovers and a hotted up pink Mini. All in all, the parking lot looked like a luxury car showroom and it was just a quiet Monday afternoon.
The 3.3 shopping arcade has several floors of small independent fashion boutiques selling a variety of trendy clothes and a fair share of grade-A fake products, but there are no obvious draw cards to entice such a selection of high-rollers to this part of town. I wondered if something special was going on in the neighboring Opposite House hotel, but it seemed not. Even the friend from LA was with was stunned and stated that she rarely saw such scenes even in LA.
The simple fact is that the numbers of luxury cars now being seen on Beijing’ streets is becoming ridiculous. I’ve lived in Tokyo and spent a lot of time in Hong Kong – both cities with significant wealth where you see plenty of luxury motor vehicles. In these cities I take pleasure in seeing a luxury car, preferably a vintage one beautifully restored. Even a custom designed sports car could make me smile. What I see these days in Beijing is boring. Luxury cars are becoming like designer hand bags, you see the same style and brand over and over again and people aren’t buying them necessarily because that car suits their character or taste, but simply because they want the most expensive and their choice is limited. With no vintage car market at all in China the rich are left to buy brand new Lamborghinis, Ferraris, Masseratis, Bentleys and Porsches. On the next rung down, its all Mercedes BMWs and Audis. Someone mentioned to me recently that Mercedes is getting worried they are becoming too ‘mass market’ in China because too many people now own one!
I love the fact that I’m in the centre of this booming industry right now, but honestly, sometimes it’s a major worry. Where is China going with all of this consumption and will it be considered as life enhancing in the end? Chinese understand luxury as ‘products’ and ‘things’, and this is the first stage of an economy rapidly catching up with the world. I wonder how long till the Chinese realize that luxury can also be intangible and mean having free time, clean air and some nice old things. With roads already jam packed all a luxury sports car does it get you to the next traffic jam .5 seconds faster than the guy in the Toyota. With some luxury brands also peddling their own bicycles, maybe its time to start a luxury branded subway car – it may be the only way to get the new generation of Chinese to ride it.