Rolls-Royce Expects China Growth to Slow Due to Government’s Austerity Measures image

Rolls-Royce expects a slowing growth in China as the government looks to reduce the lavish spending.

“Business isn’t any longer as explosive as it was the years before, but we’re still optimistic here with the market,” CEO Torsten Mueller-Oetvoes said.

Rolls-Royce sells in China almost a quarter of its vehicles and this year it expects an increase in the region of only 2% or 3%. In 2012 the automaker’s sales in China rose 16% to 998 units, according to data from LMC Automotive. Although sales in the Asian country are expected to be low, the automaker relies on growth from other markets such as the US and Russia. The company also plans to have 20 dealerships in China by the end of the year from the current 16.

“Maybe some customers might think about that,” Mueller-Oetvoes said in reference to the austerity drive. “But all in all, my feeling is that the culture here allows for the demonstration that you’re successful in life and you have achieved certain things.”

HIS Automotive predicts that this year global sales of vehicles priced more than 100,000 euro will surpass the peak reached in 2007, and will continue to increase by 35% to 540,000 units by 2015. This surge will be caused by a 52% increase in demand from North America and 34% in China.

Source: Automotive News Europe