Client Affairs

Luxury Car Brand Cruises Into China

Tara Loader Wilkinson Editor Asia 30 August 2012

Luxury Car Brand Cruises Into China

Ford Motors, the US automobile firm, is set to launch its luxury Lincoln brand in China by the second half of 2014, in a bid to tap one of the world's fastest-growing millionaire populations.

It will be the first foray outside of North America for Lincoln Cars, which can retail at around US$35,000, and will initially be executed through an independent dealer network, said the firm in a statement. Ford also appointed a new team to head growth based out of Beijing. This will be lead by Rich Baker, a 35-year Ford veteran who is now Lincoln general manager for China.

"Introducing Lincoln in China marks the next step in our expansion in Asia and our commitment to serving customers in the luxury market,” said Ford Motor Company president and chief executive Alan Mulally at a press conference held in a temple in Beijing. “We recognize the growth potential for Lincoln in China, building on the growing appeal of our new Lincoln products and unique, personalized customer experience in North America.”

A new era

“Globally, we’re seeing a new generation of luxury clients who value more individualistic and tailored options,” said Jim Farley, group vice president, global marketing sales and service, Ford Motor Company. “In China, the emerging luxury buyers are younger and fast-changing, and they have a strong desire to understand and appreciate the heritage of a brand- the origins of its real values such as timeless elegance, sophistication and craftsmanship in Lincoln.”

The 100-year old US firm is building five new plants in China, including in Chongqing, which is home to the largest manufacturing location for Ford outside southeast Michigan. Once completed, the plants will double the company’s capacity in China to 1.2 million passenger vehicles a year.
 
The expansion, the largest by Ford in 50 years, is planned to help the automaker realize an increase in global sales by around 50 per cent from 2010 to about 8 million vehicles annually by mid-decade.

The growing middle-class consumer population is attracting increasing numbers of Western luxury brands to China. This week premium yacht maker Ferretti Group announced its first Chinese assembly yard, reported here

Luxury for an Evolving Market

The luxury segment in China is forecast to surpass that in the US by 2020, according to data provider IHS. In China, luxury vehicle sales are expected to more than double – from 6 per cent of the market today to nearly 9 per cent by the end of the decade, according to the US-based researcher. Annual sales of luxury cars are forecast to be approximately 2.7 million units by then.
 
In China, consumers now see luxury as more than a product, according to an intensive observation study of luxury car buyers conducted by TNS China, 'Targeting luxury car drivers in China'.
 
The study showed that while many affluent consumers in China are still motivated by a primary desire to display their wealth noticeably, data gathered over the last 2 years reveals that a select group of consumers are evolving towards purchasing luxury for the personal experience rather than as an outward signal to others. Their motivation to purchase is also led by self-discovery of products and services that meet their own unique demands, providing a high degree of self-reward in making the right choice.
 

 

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