Inchcape’s £170m China drive
LUXURY cars have become the must-have status symbol among China’s fast-growing middle class, prompting Britain’s biggest motor dealer to spend £170million on a sales drive to target them.
Inchcape is planning to open 17 dealerships in China over the next five years, selling western brands such as Toyota, Lexus, Jaguar and Land Rover.
The group opened its first outlet there three years ago and now has three. Sales grew by 31 per cent last year.
Chief executive Andre Lacroix said: “After trialling our pilot operations we are ready to go to the next phase.
“What is fascinating about China is that they really like foreign brands such as Jaguar and Land Rover. These brands are very aspirational among the middle class.”
Although rival Pendragon has more UK outlets, at £1.8billion Inchcape is by far the largest UK car company by stock market value thanks to its overseas operations in 26 countries.
The group generates a third of its income from the UK and western Europe and two thirds from Asia Pacific and emerging markets.
After trialling our pilot operations we are ready to go to the next phase
Group pre-tax profits rose 31 per cent in 2010 to £214million on total sales up 2.6 per cent to £5.8billion.
In the UK, where it has 128 outlets representing brands such as BMW, VW, Mercedes-Benz and Jaguar, sales were up 1.9 per cent at £2.1billion, with profits up nearly 20 per cent to £55.9million, lifted by new car sales, after-sales and servicing. The shares, up from 126p two years ago, rose 2p to 393½p.
Highlights for 2011 include the new Range Rover Evoque, the BMW X6 and Mercedes-Benz CLS.
Lacroix sees future growth being driven by emerging markets such as Russia where it has 21 outlets.
Lacroix said the big trend in emerging markets was the shift towards premium and luxury cars.
In mature markets, such as the UK, there was a move towards green technology, such as hybrid cars.
