The American Automaker Is Enjoying Record Gains In China’s Rapidly-Growing Automotive Market, Despite Difficulties At Home
GM has enjoyed record success in China over the past four years. But will domestic upstarts like BYD woo Chinese car buyers away? Photo © BusinessWeek
With GM’s impending bankruptcy and restructuring in the news over the last week, it is easy to lose sight of the company’s global reach and mixed revenues. Although the company has had unprecedented difficulties in the North American market, brought on by the global economic downturn, in China — where the company has operated (with a roughly 30-year interruption) for decades — GM has been the leading foreign carmaker for the last four years.
Although China’s domestic car makers — spurred by huge foreign and government investment over the past few years — are making great strides, since the formation of the Shanghai GM joint venture in 1997, the company has worked hard to rebrand itself for the China market. All of this work has paid off in China, since as of last year, GM built an estimated market share of 12.1% on sales of nearly to 1.1 million units.
Posted in Automobile, Business, China, Culture, Investment, Luxury
Tagged Automobile, automotive, buick, BYD, cadillac, car, China, chinese, general motors, GM, GM Shanghai, Luxury, PATAC, porsche, shanghai, shanghai auto show
Chinese Buyers Buy 18 Works From Collector, Founder Of Beijing’s Largest Private Art Museum, Who Holds One Of the World’s Largest Active Collections Of Chinese Artwork
The Ullens Center, in Beijing, houses one of the world's top collections of Chinese art
Big news coming out of the Chinese art world today. Bloomberg reports that Guy Ullens, the Belgian industrialist and collector of Chinese art since the mid-1980s, has sold 18 works from his collection for over $20 million (151.7 yuan). Ullens, whose collection is made up of hundreds of pieces spanning centuries of China’s long artistic history, put these works, many of them duplicates or triplicates, up for auction to add to efforts by his popular Beijing museum of contemporary Chinese art to reach out to China’s burgeoning collector base and art enthusiasts.
According to Bloomberg, the huge returns on Ullens’s sale indicates two important developments in the Chinese art world — for one, the quality of the Ullens collection, and two, the motivation of Mainland Chinese collectors to buy Chinese art now. While the Ullens collection has long been considered one of the top collections of traditional and contemporary Chinese art, until recently the local Chinese collector base has stayed out of the picture, mainly sticking to purchasing the occasional western master or ancient Chinese antique. Now, however, as the Chinese New Collector becomes increasingly influential in art auctions around the world, sales like that of Ullens’s artwork are, as we’ve seen in the last year or so, becoming more heavily populated by Mainland buyers.
Bloomberg points out that the success of this sale reflects the trend that we have been observing since before the global downturn struck, of Chinese buyers (and Chinese auction houses) growing in number and influence. This extends not only to the sale of Ullens’s artwork, but to every corner of the auction market, from contemporary and traditiional Chinese art to wines and jewelry. As the article points out as well, the breadth of Ullens’s sale — which included contemporary artists like Zhang Xiaogang, who sold for 15 million yuan to a Chinese buyer — shows that the Chinese collector has truly arrived.
Posted in Art, auction, China, Chinese Art, Investment, Luxury, Museums
Tagged Art, auction, beijing, chen yifei, China, chinese, guy ullens, liu xiaodong, mainland, poly, ullens collection, zhang xiaogang
Construction On A Number Of Stalled Projects To Start Up Again, As City Aims To Cement Its Reputation As The “Vegas Of The East”
One Central, set to be completed within the year, is to be one of Macao's top luxury residential complexes
Macao, the former Portuguese colony that rejoined China in 1999, has had its share of ups and downs over the past few years. In recent years, the city replaced Las Vegas as the world’s largest gambling market by total revenue, but not long after gaining this distinction, the city was hit hard by the global economic downturn — which bit into the city’s crucial tourism industry as well as its breakneck pace of construction. Now, as the recession eases somewhat in the region — China itself has not been hit as hard as many more developed economies — Macao aims to restart its vast construction efforts and attract more young professionals, luxury shoppers, and gamblers.
Today, the New York Times has a great article on the ongoing transformation of Macao — what was once a backwater trading hub has, like its neighbor Hong Kong, over the years become an important business and tourism center. As the city continues to carve its unique place in the Chinese and East Asian economies, developers continue to work hard to create in Macao a world-class real estate and travel destination. With large-scale luxury developments like One Central due to open within the year, it looks like Macao is, indeed, starting to get back on its feet:
Posted in Business, China, Economy, Investment
Tagged casino, China, construction, gambling, hong kong, Investment, macao, macau, mandarin oriental, one central, real estate, wanchai
Report Groups Chinese Luxury Consumers Into Four Distinct Classes
Photo © PSFK
PSFK reported earlier this week on German consultancy Trendsbüro‘s new report on the luxury market in China. The site notes that China is projected to become the world’s biggest luxury market as early as 2015, owing to its rapidly-growing middle class and rising consumption rates among younger consumers — who we have profiled before. The Trendsbüro report, PSFK points out, “breaks down Chinese luxury consumers into four types – Noveau Rich, Understaters, Connoisseurs and Spirituals – based on social background, luxury experience and income level.” This is unique among luxury profiles of Chinese consumers, which typically are more quantitative. The Hurun report, as we noted, focused more on statistics rather than more specific buying habits, but the Trendsbüro report appears to be more exhaustive in its findings.
Trendsbüro produced an excellent video, which further illustrates how the Chinese luxury market is shaping up. Although, with China’s vast population, luxury buying trends will differ based on gender, age, education, taste and geography — and buying habits will be quite different in cosmopolitan first-tier cities like Shanghai and emerging third-tier cities like Changsha — this video gives a good introduction for anyone who is interested in China’s luxury potential:
Travel Professionals Estimate Upwards Of 50 Million Chinese To Travel Abroad In 2009
Younger Chinese tourists are coming to cities like New York in greater numbers, many of them looking to shop
The vast potential of the Chinese tourism industry is not a new subject. Over the past several years, as the number of Mainland tourists heading abroad has increased, and procuring visas has become incrementally easier, hotels, airlines, travel operators and restaurants have worked to accomodate the expectations and needs of this rapidly-growing customer segment. Much like in the 1980s, when the exploding number of Japanese and Korean tourists gave many hotels in North America and Europe the impetus to include tea and slippers in their rooms, the growing wave of Mainland Chinese tourists will undoubtedly reshape the industry in noticeable ways.
The New York Times discussed the potential windfall these tourists could bring to the New York economy last spring, writing that Chinese tourists — most of whom have never left their country before — tend to spend freely and are relatively easy to please, since the majority still come to America on all-inclusive tour packages.
Posted in Business, China, Culture, Economy, Investment, Luxury
Tagged asia, China, chinese, japan, minneapolis, New York, phoenix, san antonio, shanghai, tourism, travel
Analysts Indicate That Low Ownership Rates, Government Subsidies May Spur Faster Growth Of World’s Largest Auto Market
Dongfeng is looking to compete with other domestic Chinese brands to capture market share from foreign competitors
From the recent Shanghai Auto Show to news that the Chinese government plans to offer higher subsidies for consumers trading in old vehicles for new ones, China’s auto market has been a busy place in recent months. With the sluggish performance of carmakers in more developed global markets, the news that auto shares in China — currently the world’s biggest car market — are expected to outperform this year will, in many ways, comfort global auto companies.
However, as we have previously discussed, the news that Chinese car buyers are growing rapidly as a consumer base shouldn’t be enough for foreign automakers — as domestic brands like BYD, Geely, Chery and others vie for dominance in this rapidly-changing market, foreign automakers will have to invest heavily if they are to keep the lead they have built in the last 10-20 years.
Posted in Art, Automobile, Business, China, Investment, Luxury
Tagged Automobile, beijing, bmw, car, chery, China, dongfeng, geely, great wall, marketwatch, porsche, shanghai, shanghai auto show, vehicle
Andre Cohen (LVMH, Swatch, Timberland) Responsible For Leadership & Results Of Coach China — Including Mainland, Hong Kong And Macau
Coach opened one of its largest Asian locations in Hong Kong last summer: The company is looking to expand quickly in the lucrative Mainland market as well. Photo © Hong Kong Hustle
It is no secret that American luxury brand Coach has its sights set on the rapidly-growing Chinese luxury market — we have written before on the company’s long-term growth strategy in the Greater China region. As other luxury brands enter the Chinese market, many of them focusing on the country’s burgeoning second- and third-tier cities (where middle-class growth is expected to grow the fastest), Coach is retooling its marketing and brand positioning platform to become even more competitive.
The company’s newly-appointed China Region President, Andre Cohen, who is due to begin his job next month, has a great deal of experience building western brands in the Asia-Pacific region — having spent time in Singapore, Malaysia, and Japan working for Timberland, Swatch, and LVMH — and Mr. Cohen’s plans for the China market are shaped by his successes with these brands in other Asian markets.
Posted in Business, China, Fashion, Luxury
Tagged andre cohen, asia, China, coach, consumer, hong kong, japan, louis vuitton, Luxury, malaysia, singapore, swatch, timberland