Rolls-Royce Targets China's Really-Rich

For most of the world's automakers, China is all about big numbers. The Chinese market is the biggest in Asia and the second-largest in the world, behind only the U.S. Last year the Chinese purchased 8.3 million vehicles, including 5.2 million cars, sport-utility vehicles, and mini vans. With solid growth this year, the number of cars, trucks, and other vehicles sold in China is likely to hit 9.5 million, according to J.D. Power & Associates (which, like BusinessWeek, is owned by The McGraw-Hill Companies (MHP)). That's why General Motors (GM), Volkswagen (VOW), Toyota (TM), and other Western and Asian automakers are targeting the country.

Colin Kelly, though, is one auto executive who lets the other guys look at the millions and millions and focuses on a much smaller number. To be precise, 106. That's how many super-luxury cars Rolls-Royce sold in China and Hong Kong last year, with 26 in the former British colony and the rest in the mainland. One hundred and six may not sound like a lot, but that's 10% of the BMW-owned company's worldwide sales, says Kelly, the Singapore-based Asia-Pacific regional director for Rolls-Royce Motor Cars. This year, Kelly expects Chinese sales of about 170 vehicles, putting China and Hong Kong ahead of Britain as the second-largest market for the English-made luxury cars. (The U.S. remains No. 1.) "We have great expectations," crows Kelly.

Rolls-Royce is now building up its China operations in order to meet those expectations. The company has recently moved into bigger showrooms in Hong Kong, Beijing, and Shanghai, and last month confirmed that it is working with local partners to expand into smaller cities such as Shenzhen in the south and Hangzhou in the east. Kelly says that Rolls-Royce is also looking at other, second-tier cities "very closely."


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