Read this early today. We all recognize China as a burgeoning market, with staggering total home production and sales.
Pretty attractive to importers as well... now would be the time to score a dealership. Edward Zao, any plans?

China Drives Porsche to Record as Buyers Wait for Cayenne

By Bloomberg News - May 23, 2011 6:01 PM ET

Liu Yirong walked into Porsche SE’s Shanghai dealership planning to buy the carmaker’s $137,000 Cayenne sport-utility vehicle. He left with a coffee-colored 911 Carrera sports car instead.

“I wanted a Cayenne but there weren’t any available,” said the 32-year-old Liu, who works in the chemical industry. “They said I have to wait two years.”

Chinese customers ordering a Cayenne with a 3.0-liter engine wait an average of 15 months for delivery, the longest for the vehicle globally. Porsche forecasts record 2011 deliveries globally as China sales grow 35 percent, putting the Asian nation on track to overtake the U.S. as its largest market in 2014, said Helmut Broeker, the automaker’s head of China.

Porsche, Bayerische Motoren Werke AG (BMW) and Daimler AG (DAI)’s Mercedes-Benz all posted four-month sales increases in China exceeding 30 percent as rising numbers of wealthy Chinese seek out German luxury cars as status symbols. The gains are outpacing a slowing overall market, which advanced 8.1 percent in the first quarter, the weakest in two years.

“Chinese consumers are becoming increasingly brand savvy and Porsche is a very potent brand,” said Tim Urquhart, a senior analyst at industry consultant IHS Automotive in London.

German luxury carmakers are banking on China to help boost profit as higher demand in the country for premium goods means they can charge more for their vehicles. The most basic Cayenne model costs 893,000 yuan ($137,000) in China, while its closest competitor, BMW’s X6 SUV, starts at 1.05 million yuan. Both vehicles sell in China at more than double the U.S. price.

Matching Make-Up
Porsche, which is in the process of merging with Volkswagen AG (VOW), said last month first-quarter operating profit at the auto- making unit more than doubled to 496 million euros ($695 million) on demand for the Cayenne, its best-selling model. The carmaker aims to sell more than 100,000 cars for the first time this year and double global deliveries by 2018 to 200,000.

Porsche has been tailoring cars and marketing activities to Chinese tastes to lock in more buyers. Cup holders have been replaced by half-liter bottle holders after the company noticed Chinese buyers with such containers. The carmaker created a new color called “China Pink” after a customer in Chongqing wanted her Cayman painted the same shade as her make-up, said Jan Kuppen, Porsche’s China product manager.

Mongolian Lake
It also spent four days transporting its Boxster, Carrera and 911 models to a frozen lake in Inner Mongolia in March to allow buyers to test drive them on snow. The drivers sped down a solid ice lake, throwing up ice clouds in their trail.

The added attention will help lift China to about a quarter of Porsche’s deliveries in 2014, up from 15 percent now, Broeker said in an interview in Beijing. The automaker targets record sales this year in China of more than 20,000 vehicles after boosting 2010 deliveries on the mainland 63 percent.

“The Cayenne came in 2003 when the market was just taking off,” Broeker said on May 21. “It was the right product at the right time. We also found a lot of customers enjoyed a higher ride in the car in the busy streets of Beijing and Shanghai because you have a much better view of the traffic situation.”

The 3.0-liter engine used in the carmaker’s Chinese model is in short supply because the factory which makes the motor, which is used as well in other Volkswagen group SUVs sold in China, can’t keep up with the demand. Porsche is working on ways to ramp up production and reduce the waiting time for the Cayenne to six-to-nine months by the end of 2011, Broeker said.

More Dealerships
Porsche plans to triple its dealer network in China to about 100 from 33 by 2018 at the latest. The carmaker will inaugurate 10 dealerships a year, with openings in smaller cities such as Ordos in the northern Chinese province of Inner Mongolia, and Haikou on Hainan Island in 2011.

Luxury-car sales in China will rise 20 percent this year after surging 48 percent to 459,000 vehicles last year, according to industry researcher JD Power & Associates. Total deliveries in 2010 grew 32 percent to 18.1 million vehicles, surpassing the U.S. for a second year.

Porsche, maker of the 911 sports car and four-door Panamera, may consider producing a planned small SUV called the Cajun in China in the future.

“You need 25,000 cars of one model alone to make it a viable business case,” Broeker said. “One that could be considered definitely would be the small Cayenne, the Cajun.”

The Cayenne’s popularity may also have a negative impact if the carmaker doesn’t shorten waiting times. Tony Tian and his three business partners dropped by the company’s dealership along Shanghai’s busy Nanjing Street in search of a company car.

“It’s a powerful car and the exterior looks very professional,” said Tian, who spent about 20 minutes checking out the yellow Cayenne on display in the store. Even though the Cayenne was their first choice, the four were unlikely to wait and would buy BMW’s X6 SUV instead, the stout 32-year-old said.

“I’m not disappointed,” said Tian. “There are still a lot of choices out there.”