After many years of spectacular growth, Rolls-Royce sales in China are being hit by the country’s crackdown on corruption and conspicuous consumption.
Wealthy Chinese buyers are thinking twice before making ostentatious purchases that would attract unwanted attention from authorities.
“There’s a cool wind blowing in China on Rolls-Royce sales. The money is there, but people don’t want to show off by driving around in a Rolls-Royce,” Peter Schwarzenbauer, the BMW AG board member who oversees Rolls-Royce, was quoted as saying by Bloomberg.
He added that the company has adjusted production to adapt to a decline in deliveries of as much as 15 percent in China.
But Rolls-Royce is not the only luxury brand confronted with slowing demand in the world’s largest car market. Audi, the No. 1 premium brand in China, last month posted its first sales decline in the country in more than two years. The drop in demand is due to the fact that affluent buyers are cutting back on spending.
Losing sales in China also affects profitability, as buyers there typically order highly personalized vehicles which are sold for much higher prices than standard models.
Rolls-Royce’s global sales are also declining, with deliveries down 13 percent to 781 cars in the first quarter of this year. That follows a record 2014, when the brand sold 4,063 units, a rise of 12 percent over 2013.
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