As years of profits thanks to China’s growing appetite for hyper-luxury are almost at an end, automakers are signaling a shift back to more traditional markets such as the U.S. and Japan.
China’s incredibly fast rising economy is now winding down to a “normal” level, so automakers like Ferrari, Lamborghini and Rolls-Royce now voice their concern, even though China three years ago snatched the world out of recession. A slowing economy, pollution worries and a government push against lavish spending begin to take their toll on sales of luxury goods.
“Luxury carmakers are suffering, and a lot of high-class restaurants that serve expensive dinners are suffering too,” said Andreas Graef, a consultant at A.T. Kearney in Shanghai. “Clearly China’s millionaires and billionaires are more cautious of how they show off their wealth, from expensive watches to expensive liquors.”
“The U.S. is really getting back on track and getting more important for us,” Lamborghini SpA Chief Executive Officer Stephan Winkelmann said in an interview in Tokyo. In China, “there is a slowdown in high-end luxury,” he said.
Lamborghini is not the only carmaker seeing a problem. Rolls-Royce CEO Torsten Mueller-Oetvoes said a few months ago the “explosive” growth in China has faded, but he is rather optimistic. Ferrari, the most profitable unit at Fiat, says that while it grew North America sales 9 % and Japanese deliveries by 28 %, in the same period in China it sold just 350 cars, 50 less than a year ago.