Manufacturers of luxury vehicles like Porsche, Bentley and Maserati are competing with each other even in Inner Mongolia. In March, a dealership of Porsche opened in Ordos, which is a sparsely populated mining city where the mausoleum of Genghis Khan is located. The opening of the dealership follows a sales leap of 10 times in four years to 200 automobiles, the head of Porsche China revealed.
Also, Maserati and Bentley executives have said they intend to launch showrooms in the city. Helmut Broeker, Porsche's CEO for China operations, noted that the rare-earth and coal mine business in Ordos developed "very well in the last years." He also said that there have been many people who "made a lot of money."
Showrooms for premium vehicles are sprouting up in rural cities from Ordos to Chairman Mao Zedong's birthplace of Changsha while growth slows in the country's eastern coastal megacities. Ownership levels of luxury cars at these megacities are higher than those in the United Kingdom and United States.
This means that western and central China may trigger the next phase of growth for the mainstream and high-end automakers competing in the biggest vehicle market in the world. Managing Director Ashvin Chotai at industry researcher Intelligence Automotive Asia revealed that major cities like Shanghai, Guangzhou and Beijing fueled the early phase of the vehicle demand boom.
The expansion into the smaller cities and inner provinces is "a natural aspect of the evolution" of the automobile market, Chotai said, adding that this will be a continuing process over the medium and long run.
While nationwide premium vehicle ownership in China lags behind the worldwide 10% average by two percentage points, the country's share in eastern coastal provinces already surpassed European and U.S. levels, Sanford Bernstein said in a report this month.
As an example, premium vehicles accounted for 24% of vehicles in Beijing during the first half of 2011. This is more than double the 11% U.S. average, according to the report.