Why McLaren Is Racing Ahead In China Despite Luxury Market Slowdown

Although the highest end of China’s luxury car market is in slowdown mode, British luxury sports car manufacturer McLaren is going full-speed ahead with its China expansion, according to a recent CNBC interview.

In the video embedded above, McLaren’s Asia-Pacific director Mirko Bordiga announced that the brand’s four dealership openings this year were “just the first wave” for the company, which will be introducing eight additional dealerships in China next year. This decision comes at a time when the brand’s main competitors—Ferrari, Lamborghini, and Rolls-Royce, are scaling back their focus on China as they see the United States as a bigger opportunity for growth.

While mass luxury auto brands such as BMW, Daimler, and Audi have a more upbeat outlook for this year as sales pick up, the highest end of the market is still feeling the effects of China’s luxury slowdown. This is likely due in large part to greater concerns among China’s wealthy about showing off ostentatious wealth in the wake of Xi Jinping’s anti-extravagance campaign, which has included a ban on the use of military license plates on luxury vehicles.

According to Bordiga, the company’s novelty is helping it compete in this tricky business environment. “In markets that are new such as China, they like new things, things that are cool,” he said. “So since we are the new kids on the block, we are experiencing a lot of demand.”

McLaren only started making road cars three years ago, and its heavy expansion now signals a faith in the continued importance of the China market, which Bordiga says will comprise 10 percent of the company’s business next year. “If you look at the P1 – just 375 units are produced worldwide and out of this 38 have been sold in China,” he said.

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