In China, luxury car makers drive inland

Updated: 2011-11-15 14:24

(chinadaily.com.cn)

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Chen Beiyin bubbled with joy when she picked a $141,700 Mercedes-Benz E350 coupe for her dowry and topped off the wedding with a lavish procession that included 12 S600 sedans, the priciest cars in the fleet.

"My dad drives an S-class and my husband a C-class. So when my dad asked me what I wanted for a wedding gift, I picked Mercedes-Benz too," recalled the 29-year-old Chen, who has an MBA degree and goes by the English name of Helly.

"You know, girls of my age fancy sports car these days. I kind of hesitated between SLK and E350, but I went for the latter because the SLK is much too showy."

Chen, who hails from the tiny but wealthy city of Cixi in eastern Zhejiang province, not only reflects China's burgeoning affluence, but she and others like her represent a new trend -- rich consumers far from the major metropolitan centers.

And luxury carmakers are racing to follow the money.

Cixi, a fifth the size of Shanghai but with an average personal wealth on par with mainland China's financial capital, is among a slew of smaller cities that mark a new competitive frontier for top global luxury auto sellers.

The city is known for its entrepreneurs, with nearly a third of families owning their own businesses. Chen's father made his money manufacturing magnets.

Audi, BMW and Lexus have all staked their claims, setting up showrooms around the outskirts of Cixi, about two hours drive south of Shanghai. Jaguar and Land Rover also reportedly selected a site in the vicinity.

"It's the absolute right thing to do for the carmakers because the market has been expanding," said Klaus Paur, managing director of greater China at industry consultancy, Synovate Motoresearch.

"Historically, it's the big cities and the coastal belt. But now rich people are not only in tier 1 and tier 2 cities, they are in tier 3 and tier 4 cities as well."

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