China's Wealthy Increasingly Want Interior Luxury, Exterior Humility#
As luxury automakers and industry observers (or anybody who spends a fair amount of time in Beijing or Shanghai) knows, China's high-powered business and political elite likes their cars long. Over the past several years, as China surpassed the U.S. to become the world's largest auto market, the likes of Mercedes-Benz and BMW have actively localized flagship models to cater to China's whims. Beyond the occasional "China-only," dragon-covered or simulated porcelain edition, some of the most successful luxury sedans in China have been extended-cab models, as chauffeur-driven execs tend to view their land yachts as mobile offices and, as such, appreciate features like Yao Ming-worthy legroom and built-in desks.
Though Bentley said this spring that Chinese ultra-luxury auto buyers are becoming increasingly interested in smaller vehicles, the business set continues to go bigger, if not better. This week, Bloomberg writes that one of the most popular rides for the "mobile office" manager in China right now is built not by Rolls-Royce or Bentley, but Buick. Though not normally mentioned in the same breath as its luxury auto counterparts in its home market of the U.S., Buick has been highly successful in positioning itself as a solid high-end brand in China over the past decade -- leaning on its long history in the country (Last Emperor Puyi owned one, Sun Yat-Sen was photographed in one in 1912, and Zhou En'lai kept a 1941 Buick at home in Shanghai) while leveraging its local joint venture to pump out a staggering number of vehicles.
In recent years, the business elite in China has been fixated on a particular Buick model that most Americans would see as a soccer mom must-have rather than a high-powered dealmaking machine: the GL8 minivan. Though American buyers have fallen so deeply out of love with the humble minivan that Detroit-based Buick no longer makes them for its home market, China remains firmly under their spell.
"It is a perfect example of where one product can be revered in one country and reviled in another," said Rebecca Lindland, an industry analyst with IHS Automotive. In China, the Buick GL8 is "ubiquitous, like a Town Car in Manhattan or chauffeured limousine in L.A."
Sales in China of the GL8, which retails for as much as 388,000 yuan ($61,000), rose 28% last year to 66,900, according to researcher LMC Automotive. Minivan sales will grow 13% this year to 560,000 units, the second-best-performing category after SUVs, China's Association for Automobile Manufacturers forecasted on July 26.
With an interior modeled after a luxury yacht, the GL8's appeal is that there's room for several adults to sit comfortably and conduct business. The newest version comes with automatic sliding doors and a 220-volt electric socket for laptops, as well as optional leather seats and DVD player.
"In the U.S., if you have a chief executive driving a minivan, it looks funny," said Allen Tsaur, president of Asian operations for Cooper Tire & Rubber in Shanghai, who has leased four GL8s during the past decade. "Here, people accept that. It's become the norm."
Aside from the fact that these minivans: A.) Carry the Buick name, which is highly respected in China and B.) Have plenty of room and can easily function as an office away from the office, we feel that part of the reason for the minivan's success among Chinese execs is the fact that they can be well outfitted on the inside while still appearing somewhat understated on the outside. In the current political and economic climate in China, in which conspicuous consumption is a serious no-no, the last thing an ultra-wealthy entrepreneur or CEO wants is scrutiny, and nothing says "nondescript" quite like a minivan.
In the same way that some Wall Street execs and celebrities in New York are now shuttled around in customized Mercedes vans -- which bear a striking exterior resemblance to the type commonly used by delivery and moving companies and attract far less attention than, say, a Lamborghini Urus -- China's privacy-prioritizing elite wants interior luxury and exterior humility.