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(Bloomberg) -- Four years after China’s President Xi Jinping started cracking down on corruption and conspicuous consumption, the most extravagant fast cars are making a comeback.
Chinese sales at Ferrari and Aston Martin are approaching their 2013 peaks, following tumbles of as much as 20 percent in 2014, according to data compiled by Bloomberg Intelligence. Maserati, McLaren and Porsche enjoyed their best year ever in 2016. Lamborghini is also on the mend after deliveries plunged by more than half from 2013.
“The outlook is looking pretty good for us here in the China market,” Reid Bigland, head of Fiat Chrysler Automobiles NV’s Maserati and Alfa Romeo divisions, said in a Bloomberg Television interview at the Shanghai auto show Wednesday. “With us, we just haven’t felt it,” he said, referring to the impact of the crackdown on consumption.
Xi hasn’t ended his drive to curb wasteful spending by officials and eliminate graft. Instead, private consumption is filling the void left by extravagant gifts aimed at currying political favor. The number of Chinese millionaires rose 10 percent last year and is expected to more than double to over 1.7 million by 2026, according to research by Johannesburg-based consultancy New World Wealth. Consumer confidence is the highest since the global financial crisis amid a strengthening Chinese economy.
Bloomberg Intelligence analyst Steve Man says consumers have become inured to Xi’s campaign.
“Business owners are coming back into the market to snap up these vehicles,” he said. “The improvement is very encouraging for China. It could point to a potential improvement in the entire luxury auto market.”
A 10 percent “super luxury” tax announced by the Ministry of Finance in December to “guide reasonable consumption” and cut emissions hasn’t damped the lust for cars costing more than 1.3 million yuan ($189,000).
Maserati’s sales have surged 119 percent year to date, said Bigland, who is planning to increase the number of outlets for the Maserati and Alfa Romeo brands in China by 50 percent to as many as 75 by the end of the year.
McLaren Automotive Ltd. is expecting to sell 300 cars this year in China, after almost doubling sales to 235 in 2016, sales chief Jolyon Nash said. Ferrari Greater China maintains a pivotal position in the carmaker’s global strategy, Ferrari said in a statement.
It isn’t just the super-rich who are splurging. At a somewhat lower price, demand for BMWs and Audis is growing as well. Total sales in China’s premium-car market may surge to 3 million units per year in about a decade from about 2 million now, Audi chief Rupert Stadler said in Shanghai on Wednesday. The Volkswagen AG nameplate leads the premium segment in the country. Honda Motor Co.’s Acura aims to sell 30,000 vehicles this year, while Hyundai Motor Co. is planning to bring its Genesis luxury brand as early as next year.
Xi, who took charge from Hu Jintao as China’s leader late in 2012, has shown no sign of abandoning his anti-corruption drive, a signature campaign that has struck fear across the government and helped him consolidate more power than anyone since Deng Xiaoping, the nation’s “paramount leader.” About 415,000 officials were punished in 2016, a 23 percent increase from the previous year, according to government statistics.
--With assistance from Christoph Rauwald and Brendan Scott
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