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Chinese Ultra-Luxury Car Bubble Pops As 1 Year Old Used Lambo Gallardo Sells 70% Off Sticker

Tyler Durden's picture





 

Rumors are circulating that reports of the demise of the Chinese auto market may be exaggerated now that even David Einhorn is forced to defend his GM long (because it "has a strong cash position" - sure, and stuffs channels like no other) however stripped of stereotypes and hype, the reality is that even the one time impregnable ultra luxury car market in China is now faltering at an ever faster pace. BusinessWeek reports: "Waiting lists for ultra-luxury cars in Hong Kong are getting shorter and used-car lots are cutting prices on Lamborghinis, Ferraris and Bentleys in the latest sign of China’s slowdown. At first glance, the numbers are deceiving: Sales of very expensive new autos surged 47 percent in the first six months, according to industry analyst IHS Automotive. Look more deeply, however, and another picture emerges, especially in the city’s used-car lots." The picture is ugly: "“The more expensive the car, the more dry the business,” said Tommy Siu at the Causeway Bay showroom of Vin’s Motors Co., the used-car dealership he founded two decades ago. Sales of ultra-luxury cars have halved in the past two or three months, he said. “A lot of bankers don’t want to spend too much money for a car now. At this moment, they don’t know if they’ll have a big bonus.”" Sad: they should all just go to Singapore and manipulate Libor. Oh wait, too soon?

Curiously, unlike virtually every other manipulated asset class, Hong Kong car sales provide a somewhat insulated view into the heart of China's beating economy:

Unlike Rolex watches, Gucci handbags and other luxury goods, Hong Kong’s car market hasn’t been distorted by the more than 28 million mainland Chinese who flocked to the city last year. Mainland shoppers spend 44 billion euros ($54 billion) on luxury goods while traveling overseas to locations such as Hong Kong and Europe, according to CLSA Asia-Pacific Markets.

 

“In the car market, it’s not buying like watches,” said Bill Russo, a Beijing-based senior adviser at Booz & Co. “Here you are getting a true look at a category of product bought by Hong Kong buyers. It’s a pulse check on how Hong Kong residents view the stability of the financial system.”

 

The new-car figures look better because of some short-term developments. The release of the latest models from Ferrari and Lamborghini and the opening of the first Hong Kong showroom by McLaren -- maker of the 592-horsepower MP4-12C carbon-fiber coupe -- have given sales a bump. Meantime, depressed demand in Europe means a bigger allocation of new cars for Hong Kong dealers.

So what do full ultra-luxury car lots tell us about China's humming economy? Like everything else, it is still a tale of two words: new and used. New, for now is stable...

There were 273 new Bentleys, Lamborghinis, Rolls Royces, Ferraris, Aston Martins and McLarens sold in the six months to June 30, up from 186 in the first half of last year, according to Englewood, Colorado-based IHS. This outpaced the 23 percent gain in the U.S., the world’s richest nation, and the 40 percent jump in mainland China, the world’s biggest car market, IHS data show.

 

For these buyers, price isn’t an issue and settling for second-hand is not an option, Russo said.

 

"It’s the brand image and it says something about you,” said Russo, who was formerly Chrysler Group LLC’s China head. “Used-car buyers are more price sensitive and economic cycles will affect these shoppers more. They are paying for the cars with their income as opposed to their savings.”

However, the other half of the equation, the formerly stable used car market, has now imploded. What does that mean for the average uber-wealthy American with a hankering for a new Gallardo? Go east, young man, where you can get the car at 70% of retail! Chinese retail that is.

A yellow, 2011 Lamborghini Gallardo 550 recently listed for HK$2.88 million ($371,000) on second-hand car website 28car.com is about $830,000 cheaper than a new model -- chump change that would buy a new Mercedes E-Class Coupe to run the kids to school. A silver-gray 2011 Ferrari California with 980 kilometers (613 miles) on the clock is available for HK$2.68 million. That’s a 19 percent discount to a brand new 2012 vehicle, and HK$400,000 cheaper than a 2011 version sold by Ferrari’s official in-house used-car dealer.

In short the car bubble has popped:

Someone looking to sell a 2009 Bentley Continental will have to accept HK$1.7 million, a third less than they would have received at the start of the year, Chan said.

 

In the basement automall beside Hong Kong’s Grand Hyatt hotel, trader Samuel Chui said he has stopped buying more cars.

 

“People want cash now, they don’t want the commodity,” said Chui, who reduced the number of car lots he rents from 15 to nine at the end of last year as business began to slow. “We’ve got plenty of stock and it’s not moving."

For now the marginal liquidity crunch has only impacted the used car market. Very soon the new car market will be hit too. And when that happens the Chinese luxury automarket is done, and with it sales of the highest margin products for car manufacturers everywhere, but especially in Germany and Italy. What happens then to a legacy European industry that is responsible for tens of millions of upstream and downstream jobs?

 


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Tue, 07/31/2012 - 11:36 | Link to Comment francis_sawyer
francis_sawyer's picture

 "What happens then to a legacy European industry that is responsible for tens of millions of upstream and downstream jobs?"

~~~

There's always fishing & olive harvesting... (I still like sardines packed in oil)... & Lamborghini makes TRACTORS too...

Tue, 07/31/2012 - 11:37 | Link to Comment Divided States ...
Divided States of America's picture

All the parts underneath the hood have all been replaced by knock offs made in China.

The Chinese GDP figures may go from 8.0 to 0.0 in under 5 months.

 

Tue, 07/31/2012 - 11:41 | Link to Comment Popo
Popo's picture

Underneath the hood?  Hell, in China you can buy a 100% fake Lambo for just $60k.   And apparently they're pretty sweet.   (Sweet looking, at least)

http://jalopnik.com/5919583/buy-a-surprisingly-good-fake-chinese-lamborg...

Tue, 07/31/2012 - 11:52 | Link to Comment MillionDollarBonus_
MillionDollarBonus_'s picture

As the global economic recovery falters, we need to remind ourselves that we live in a GLOBAL economy, and the challenges we face require GLOBAL solutions. The Olympics reminds of this "oneness" by bringing countries together to celebrate the Olympic games and experience the Olympic spirit. It's truly inspirational to see so many countries coming together to do something extraordinary. I can't help feeling that this is a prelude to a new era of global governance and unimaginable global growth. It's frustrating to see so much poverty in the world when so much is possible.

Tue, 07/31/2012 - 11:55 | Link to Comment francis_sawyer
francis_sawyer's picture

How about this for a GLOBAL solution?... END CENTRAL BANKING!

Tue, 07/31/2012 - 11:57 | Link to Comment malikai
malikai's picture

We must all unite together under the leadership and guidence of our unelected supragovernmental officials to overcome this crisis. Only then can we attain the true state of everlasting worldwide prosperity.

Tue, 07/31/2012 - 12:24 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Thank you, Kim Jong Un

Tue, 07/31/2012 - 12:02 | Link to Comment trichotil
trichotil's picture

"Today Americans would be outraged if U.N. troops entered Los Angeles to restore order; tomorrow they will be grateful. This is especially true if they were told there was an outside threat from beyond, whether real or promulgated, that threatened our very existence. It is then that all peoples of the world will plead with world leaders to deliver them from this evil. The one thing every man fears is the unknown. When presented with this scenario, individual rights will be willingly relinquished for the guarantee of their well being granted to them by their world government."

--Henry Kissinger

Speaking at Evian, France, May 21, 1992. Bilderberg meeting.

Tue, 07/31/2012 - 12:44 | Link to Comment reader2010
reader2010's picture

"It would have been quite impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national autodetermination practiced in past centuries ..."


David Rockefeller, Bilderberg club permanent member, 1991 

Wed, 08/01/2012 - 23:22 | Link to Comment matrix2012
matrix2012's picture

 

The Illuminati are a kind of secret world government, their main goal is to create the New World Order (NWO), a fascist-communist global 1984-style dictatorship where every citizen is totally controlled with an implanted RFID chip. One of the exoteric key institutions of the illuminations are the Bilderbergs, for example.

Within the illuminati one can distinguish THREE circles:

1) EXOTERIC (OUTER) circle: e.g. Bilderberg Group, Trilateral Commission, Council on Foreign Relations (CFR) and others. Many on this level (e.g. one-time Bilderberg participants) are more or less clueless what's really going on, but their egos are pleased that they are so close to those with the real power.

2) INNER circle: e.g. regular Bilderberg participants

3) ESOTERIC circles: e.g. Grand Masters of occult societies. That's where the NWO (New World Order) plans are erected. If these plans are implemented or not depends a lot on whether the outer circle can be convinced.

Seeing the sharp escalation of world troubles, seems it's true what's stated there about the biological clock concerns of the puppet masters!

"THERE IS ENORMOUS BIOLOGICAL TIME PRESSURE, time is running out for the esoteric circle: ZBIG BRZEZINSKI, the author of "The GRAND CHESSBOARD", is 82 years old, HENRY KISSINGER 87 years, and DAVID ROCK3F3LL3R even 95 years. They have worked many decades for their big goal and have to act (too) fast, which will bring about their downfall."

Read the full here: http://bit.ly/KHpJGw

 

Look at how far the their power reaches to individuals, institutions, corporations, mass media, broadcasts... all substantial ones are within their grips! http://bit.ly/L1pTZZ

or a more 'scientific' one, 'Who Runs the World' http://bit.ly/pQFo2F

 

And of course, one should NOT miss the more systematical divulgement of this dreadful Dark Vader organization to better grasp their puppet shows in the entire globe!

 

The History of the House by Andrew Hitchcock

http://bit.ly/MhkwoV

a terser version (.ppt): http://bit.ly/NlwRto

 

------------------------

"We are on the verge of a global transformation. All we need is the right major crisis and the nation will accept the New World Order." -- DAVID ROCK3F3LL3R

 

Sun, 08/05/2012 - 16:00 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

sorry, RFID is already obsolete.

Your DNA is a serial number you can not remove.

http://netbio.com/solutions.html

DNA Chip Gives Positive ID - Technology Review

microfluidic chip for DNA separation - YouTube

Tue, 07/31/2012 - 12:11 | Link to Comment Renewable Life
Renewable Life's picture

That's nice, but stop by the Olympics sometime and then tell me how you feel about global utopian opportunities???

It's expensive as hell, makes the cost of a pro sports game look like a tee ball game, it's a great party if you got the money, no one is talking about poverty or politics, just sex and egos!!!

The tv version we see with montages of little kids in Africa playing soccer and tears in the eyes of every athlete is produced for the masses on the planet, while the elite throw $100,000 a plate parties and exclusive after parties, every sports corporation on the planet is selling themselves to the athletes, throwing parties, giving away free shit to the athletes, and making deals!!

Having said that, the "Olympic Spirit" is a real thing and the games themselves are great!! But it's good not to create something bigger from it, then what it really is!!! All the problems of the world, Syria, Iran, the economy, oil, inflation, the third world poverty,...........it will all still be there in two weeks, and if getting together every four years to throw a planetary party of epic proportions, could solve these things.......it would have done so, the prior 29 Olympic games before these!!!

Tue, 07/31/2012 - 12:41 | Link to Comment Ookspay
Ookspay's picture

 

MDB

1) Place your hands on your shoulders.

2) Pull real hard.

3) When you hear a loud popping sound and see daylight, your head will be out of your ass!

Tue, 07/31/2012 - 15:06 | Link to Comment Carl Spackler
Carl Spackler's picture

In the interest of Olympic spirit, why not throw a global blood doping party?!

It's all the rage these days.

Sun, 08/05/2012 - 15:57 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

One Bank to rule them all and in the darkness bind them

OK, let's do eeeeeeet

Don't forget the extra lake patrols. Seems to be a rash epidemic of boating accidentz - the people simply can not be trusted without state control to ensure they are safely navigating waters thanks to their neo-liberal Libertarian "free market" "free on the water" laissez fair attitude towards other boaters and the kind gentle creatures of the abyss below.

Tue, 07/31/2012 - 13:47 | Link to Comment Jonas Parker
Jonas Parker's picture

Wow! I may really be able to afford a Rolls Royce before I die! (or is that a Lolls Loyce?)

Tue, 07/31/2012 - 17:30 | Link to Comment A Nanny Moose
A Nanny Moose's picture

I'll take a 70-73 Trans Am, Goat, or Z28.

Tue, 07/31/2012 - 11:39 | Link to Comment Vaiman
Vaiman's picture

Exactly....and if things get really tough for the rich chinese kids, the auto makers might consider building a chinese version of the russian Lada.....

Tue, 07/31/2012 - 11:32 | Link to Comment SHEEPFUKKER
SHEEPFUKKER's picture

long rickshaws

Tue, 07/31/2012 - 11:35 | Link to Comment CPL
CPL's picture

Long tire sandals made from the tires on that car.

Tue, 07/31/2012 - 11:37 | Link to Comment Bazinga
Bazinga's picture

Short shift sticks

Tue, 07/31/2012 - 12:38 | Link to Comment THX 1178
THX 1178's picture

deep cup-holders

Tue, 07/31/2012 - 11:32 | Link to Comment prains
prains's picture

can they even see over the dashboard?

 

Tue, 07/31/2012 - 11:36 | Link to Comment buzzsaw99
buzzsaw99's picture

great vehicles for cruising empty cities

Tue, 07/31/2012 - 11:38 | Link to Comment insanelysane
insanelysane's picture

Need to change the business model from Chan's Luxury Autos to Chan's Luxury Autos and Precious Metals Emporium.

Tue, 07/31/2012 - 11:39 | Link to Comment Dr. Engali
Dr. Engali's picture

I like cars but anybody willing to spend that much money on a car is nuts.

Tue, 07/31/2012 - 11:41 | Link to Comment Vaiman
Vaiman's picture

No kidding.  It's the vanity trap.   

Tue, 07/31/2012 - 11:46 | Link to Comment oddjob
oddjob's picture

Americans are tops in using their HELOC's to bid up worthless scrap iron.

Tue, 07/31/2012 - 15:16 | Link to Comment SoNH80
SoNH80's picture

Saving up for a Chery Camalo.

 

Tue, 07/31/2012 - 15:09 | Link to Comment TWSceptic
TWSceptic's picture

If you have the money, why not? It's a great driving experience and long term the cars do not lose value as fast as the dollar.

Tue, 07/31/2012 - 11:40 | Link to Comment TrainWreck1
TrainWreck1's picture

A Lamborghini is nice, but it's no Volt!

Tue, 07/31/2012 - 11:48 | Link to Comment Intoxicologist
Intoxicologist's picture

I'm guessing the used car market imploded because the car seats all smell like ass from all that roadside shitting, then promptly jumping back into the car.  Who wants to buy a car that smells like ass?

 

Tue, 07/31/2012 - 11:57 | Link to Comment Rainman
Rainman's picture

A more accurate gauge of Chinese spending habits is gambling. Wynn Macau revenue down 7.1 %

http://www.marketwatch.com/story/wynn-resorts-profit-hit-by-las-vegas-macau-slumps-2012-07-17

Tue, 07/31/2012 - 11:51 | Link to Comment Renewable Life
Renewable Life's picture

I'll know the shit has hit the fan in HK, when these lambo's start showing up on eBay!!!!

Tue, 07/31/2012 - 12:00 | Link to Comment NotApplicable
NotApplicable's picture

Like everything else in the world, they'll be owned by the central bankster that ultimately "financed" them.

Tue, 07/31/2012 - 11:53 | Link to Comment reader2010
Tue, 07/31/2012 - 11:54 | Link to Comment JohnG
JohnG's picture

I don't have aa bit of trouble paying for my 7 year old Lambo F250 since I paid cash for it.

Tue, 07/31/2012 - 13:07 | Link to Comment Intoxicologist
Intoxicologist's picture

I hear ye.  Same goes for my 10-year-old Dodge Ram-bo.

Tue, 07/31/2012 - 11:54 | Link to Comment Spitzer
Spitzer's picture

I can get a used Gallardo for $95,000 Canadian.    ??

These prices are foked

Tue, 07/31/2012 - 11:57 | Link to Comment Linus2011
Linus2011's picture

no big deal!

these kind of cars are sold off sticker 30-40% here in germany as well. only idiots on cocain and credit line pay list prices.

5 year old high end 7 series BMW sell for 20 grand here.

that is even more down to earth.

Tue, 07/31/2012 - 12:23 | Link to Comment Itch
Itch's picture

Porsche Cayenne's goiing for under £6000 at auctions... personally i wouldnt want to draw attention to myself. I grew up wanting to drive "look at me cars", but the paradoxical thing is that when i see someone driving one i think to myself, what a twat. Hence i cant escape the conclusion that other people would think the same of me. 

Tue, 07/31/2012 - 12:53 | Link to Comment Linus2011
Linus2011's picture

i do think the same. mostly dorks drive cayennes here. some of them can't even afford gas anymore here and are recorded for stealing gas.

i'd rather opt again for more classy and decent used car like the A8, 7series diesel as my next car.

Tue, 07/31/2012 - 13:29 | Link to Comment roadhazard
roadhazard's picture

I've always enjoyed being in front of a Corvette in my pick up truck.

Tue, 07/31/2012 - 14:28 | Link to Comment ali-ali-al-qomfri
ali-ali-al-qomfri's picture

with a load of fine gravel and the tail gate down..........

Tue, 07/31/2012 - 11:57 | Link to Comment RobotTrader
RobotTrader's picture

Just wait another 6 months.

When EEM and FXI start surging again, the sales of luxury cars will once again start going through the roof.

I was checking out the new McLaren in Beverly Hills yesterday looking for the new 12C, but they don't have it yet.

http://mclarengt.com/static/upload/img/d24ffbf6-2ab1-46f0-bc50-dfb5da679...

 

 

Tue, 07/31/2012 - 12:06 | Link to Comment francis_sawyer
francis_sawyer's picture

Here you go Robot T... (free shipping too)... You can put it right next to your Tonkas...

~~~

http://www.aliexpress.com/store/product/Benz-1-12-car-model-toy-car-SLR-McLaren-remote-control-car-7MHZ-40MHZ-remote-car/503995_475856540.html

Tue, 07/31/2012 - 12:59 | Link to Comment Richard Head
Richard Head's picture

Your bullshit is getting worse by the day.

Tue, 07/31/2012 - 12:09 | Link to Comment Arnold Ziffel
Arnold Ziffel's picture

Wait 'till housing pops in China.

That will be a 'shot heard round the world!' as Trillions vaporize into thin air.

Tue, 07/31/2012 - 12:38 | Link to Comment williambanzai7
williambanzai7's picture

Good news folks. Banksters are doing shitty in Hong Kong. Layoffs in progress. Expat banksters heading home. Luxury flat prices down.

Cry me a river...

Tue, 07/31/2012 - 12:54 | Link to Comment SmittyinLA
SmittyinLA's picture

The reality of a lambo in grindlocked traffic is like having the world's hottest girlfriend-but you can never ever fuck her.....unless you're ken block of DC shoes http://www.youtube.com/watch?v=LuDN2bCIyus    

Tue, 07/31/2012 - 13:01 | Link to Comment Linus2011
Linus2011's picture

on the other hand it looks like the chinese are not really doing as bad as the americans who need to stick with their crappy american cars:-)

well most of the young ones do have an iphone with car games instead and consider it as cooler as cars.

well, of course it is just replacement since they can't affort an (uncool) car.

Thu, 09/13/2012 - 02:52 | Link to Comment leo_21
leo_21's picture

I really appreciate this contribution by the writer, this post is very helpful for those who are novice and have little or no knowledge about automobile industry.
Honda Odyssey 2003 | Used Mitsubishi Delica

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