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China 2.0

Lamborghini In China, Racing To Improve Reputation

Visitors view Lamborghini sports cars at the 2013 International Automobile Exhibition in Taiyuan.
Visitors view Lamborghini sports cars at the 2013 International Automobile Exhibition in Taiyuan.
Wang Xueqiao

BEIJING — As it marks the 10th anniversary of its entry into China, Lamborghini is undergoing a major rebranding operation — and one that cuts against the current. While virtually all other luxury carmakers have focused on attracting younger customers, the iconic Italian sports car brand wants to appeal instead to a more mature customer base.

With a product line entirely consisting of makes and models with eye-catching styles and vivid colors, Lamborghini has gained a reputation as a car that attracts rich brats and priveleged Communist party princelings.

Since President Xi Jinping took office and launched his anti-corruption crusade, not only have sales of luxury cars fallen, but their owners have also been obliged to keep a much lower profile. But there is a built-in paradox: the only point of owning a Lambo is to draw attention to yourself.

This is confirmed by Francesco Scardaoni, the Italian brand's General Manager for China. "In the past, looking at our sales worldwide, particularly compared to the United States and Europe, China's customers were the youngest," he says. "But the situation has changed."

Still, though the goal is to shift the marketing toward more well-established entrepreneurs, rather than the offspring of the power establishment, Lamborghini must first face an overall drop in sales.

As publicly available data shows, while Lamborghini's global sales continued to rise from 2012 to 2014, sales plunged for three consecutive years in China from 320 units to 236. Scardaoni said that through November, the brand's sales for 2015 have recovered and exceeded its total sales of last year in China.

In the past, Lamborghini made headlines for the wrong reasons, as repeated cases emerged of young owners causing trouble in nightclubs or wrecking their cars when showing off for friends and cameras. Now the brand is focusing on marketing their new SUV model, the Urus, relatively low-profile in its features that an owner can feel comfortable driving to the office each day.

It is an approach that follows on the heels of Porsche, which grew quickly in China after launching its Cayenne SUV on the Chinese market several years ago. Over the past few years, the Cayenne alone accounted for more than 55% of Porsche's sales in China. Though producing an SUV means renouncing part of its traditional super-car DNA, Lamborghini obviously isn't indifferent to the German competitor's success.

The pleasure of owning a sports car is largely linked to horsepower. But, in the face of increasing environmental pressure, Porsche, Ferrari and McLaren have all begun to develop gasoline-electric hybrid technologies. Francesco Scardaoni, however, stated that Lamborghini has no such plans to produce hybrid or electric cars in China, even though at the 2014 Paris Motor Show it unveiled the Asterion LPI910-4 hybrid concept car.

Lamborghini is owned by the German group Volkswagen, but Scardaoni said within the group all brands are relatively independent from each other, so no R&D budget of the sports car has been cut.

Nevertheless, Reuters reported earlier this month that Volkswagen has committed to the 13 banks that provided $21 billion short-term bridge loan that if the group fails to repay in one year's time it would sell its luxury assets. That of course includes Lamborghini, which may have the company's China operations rebranding itself again.

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